Morrisons and rivals in £1.5bn bid for Iceland

The grocer Morrisons and private equity firms are among the groups that are this weekend considering making a bid of as much as £1.5bn for Iceland Foods, the up-for-sale frozen food specialist.

Five parties, including Bain Capital and BC Partners, were active last week in the "data room" examining the books on Iceland ahead of the deadline for second-round bids on January 31. Morrisons, the UK's fourth-biggest grocer, remains an active participant in the process, but it is unclear if it will make a second-round bid for Iceland, which has about 750 stores.

However, all parties face competition from Iceland's founder and chief executive Malcolm Walker, who together with its management team, owns 23 per cent of the retail group and has pre-emption rights on the final bid. The collapsed Icelandic bank Landsbanki's 67 per cent stake in Iceland, which made profits of £155.5m last year, was put up for sale in 2011.