Asda chief Andy Bond quits as talk grows of possible move to buy Home Retail

SUPERMARKET group Asda is searching for a new chief executive after announcing that Andy Bond is to move to a part-time role as chairman after five years at the helm.

The announcement came ahead of this Thursday's unveiling of the retailer's growth strategy and amid speculation that it is mulling a takeover bid for Argos and Homebase parent company Home Retail Group.

Asda said it hoped to announce a replacement for Bond shortly and that he would remain in the post until a successor was appointed.

The company said US parent Wal-Mart was looking internally and externally for a replacement for Bond who will work three days a week as chairman, a role that will also enable him to work on other projects.

Front runners among internal candidates include finance director Judith McKenna, chief operating officer Andy Clarke and trading director Darren Blackhurst.

Former HBOS chief executive Andy Hornby, who was previously with Asda and now heads Alliance Boots, is also being linked with the role.

The supermarket, which is owned by US food giant Wal-Mart, is believed to be keen on a large acquisition in the UK as it looks to close the gap between rival Tesco and boost its share of the general merchandise market.

Home Retail yesterday saw its shares rise 13.8p, or 4.92 per cent, to 294.2p, taking its market value to almost than 2.6 billion. The speculation lifted sentiment for the whole sector with shares in Sainsbury, Marks & Spencer and Tesco also gaining.

Analysts believe a tie-up between the UK's second biggest grocery chain and the largest home products retailer would make sense although given the size of the two companies any deal would almost certainly need to get regulatory approval.

Kate Calvert of Shore Capital said: "Home Retail is the market leader in most of its product categories and its market-leading, multi-channel business model would make it an attractive business.

"Its customer base also has a similar demographic profile to Asda."

Asda has a total of 371 stores, 23 depots and 24 Asda Living outlets across the UK. Home Retail, meanwhile, has 744 Argos stores and 349 Homebase outlets.

The group recently said it expects annual profits of around 290m – exceeding market expectations.

Recent industry figures from Kantar Worldpanel showed Asda was the only one of the "big four" to see a decline in its share of the UK grocery market in the 12 weeks to March 21.

The supermarket slipped from 17.3 per cent to 17.1 per cent in the period, partly as a result of strong comparatives a year earlier, when its sales were growing at more than 8 per cent.

Meanwhile Tesco moved higher in the same period as it continued to benefit from aggressive Clubcard loyalty bonuses – up from a share of 30.1 per cent to 30.3 per cent.