Iceland rumoured to be target of Middle East group

THE owners of frozen food retailer Iceland are said to be in talks with Middle East investors over a potential sale of the chain for up to £1.5 billion.

A consortium headed by the Global Banking Corporation of Bahrain is holding early-stage discussions on a takeover of Iceland, industry sources said.

It is thought the move could also fuel takeover interest from Iceland founder and chief executive Malcolm Walker and other members of the group's management. Walker already owns 24 per cent of the firm.

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Iceland is majority-owned by collapsed Icelandic banks Landsbanki and Glitnir, together holding a 76 per cent stake, although the banking assets were taken over by the Icelandic government when the banks called in administrators.

Walker, whose reported 1bn approach to buy back Iceland earlier this year was rejected, may be spurred on to table a new offer, analysts said.

Iceland was not immediately available for comment.