Somerfield suitors plan improved bid

The consortium bidding for Somerfield is ready to make a fresh approach to the board to start takeover discussions.

Last week Somerfield rejected a 103p-per-share bid from the consortium, valuing the supermarket chain at £510m.

Retail entrepreneurs John Lovering and Bob Mackenzie have met advisers Bridgewell and bankers HBOS to plan their next move. But it is believed the consortium is re-evaluating its offer.

More discussions with the Somerfield board could herald a new bid, if the management is open to the proposal. Analysts think a new bid would be in the region of 110p to 120p per share.

Mr Lovering is said to be opposed to a hostile bid, and wishes to study Somerfield's books before any official approach is made. However, this would require co-operation from the supermarket chain.

A consortium spokesman said that it was too early to comment.

Somerfield, which includes the discount chain Kwik Save, has faced years of difficult trading. Despite signs of a turn- round, recent data indicates that its market share is falling.