Private equity firms step up bids for Iceland

By Peter Ranscombe
Published on Wednesday 1 February 2012 00:00

FROZEN food chain Iceland has grabbed its biggest share of the grocery market for a decade as private equity firms were last night submitting their takeover bids for the company.

Bain, BC Partners and Blackstone were expected to make bids, investment bankers said, while rival supermarket chains Asda and Morrisons have also expressed interest in buying all or part of the business.

The deadline for the second-round offers passed last night after figures from industry analysts at Kantar Worldpanel showed Iceland had grown its share of the UK grocery market to 2.1 per cent in the 12 weeks to 12 January, up from 1.9 per cent in the corresponding period in the previous year.

A spokesman for Iceland founder and chief executive Malcom Walker said the entrepreneur wouldn’t be making a bid because, under an agreement with shareholders, he will win the auction if he matches the highest offer within 42 days. Walker and his management team own a 23 per cent stake in the company.

Asda has said it would not look to take control of the firm but is interested in 200 of its branches and could team up with one of the private equity bidders.

Failed Icelandic banks Glitnir and Landsbanki are selling a combined 77 per cent stake in Iceland in the hope that the business will be valued at £1.5 billion.

Investment bankers are working on a debt package of up to £1bn to support a potential private equity buy-out, sources said.

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