Somerfield next on the takeover list?
potential investors. Smaller rival Somerfield yesterday confirmed
that it had received an approach from a consortium of bidders, said
to include the former chairman of the Odeon Cinemas group.
Safeway is not the only UK retail chain attracting interest from potential investors. Smaller rival Somerfield yesterday confirmed that it had received an approach from a consortium of bidders, said to include the former chairman of the Odeon Cinemas group.
A report in the Financial Times newspaper said that the £500 million (€726m) bid was led by John Lovering, a businessman with a long pedigree in the retail sector, and backed by a major UK-based investor. However, the paper said that the investor was not thought to be a private equity group.
Somerfield, which is the smallest of the leading nationwide food retailers in the UK, has been struggling for many years to keep pace with its larger rivals, and in particular has taken years to recover from the ill-fated acquisition of the discount food retailer Kwik Save.
But its most recent set of results gave some indication that the company was successfully spending its way out of trouble - investing heavily in store redesign and expansion - making it a much more attractive takeover target than a year or so earlier.
Somerfield has around 1,400 stores, most of which are medium sized, and is not thought likely to attract the same level of trade interest as Safeway - although a piecemeal acquisition of some of the company's stores could interest the other supermarket operators if that became necessary as part of a takeover.
Somerfield did not give a reaction to the bid, but said simply that "the proposal is subject to a number of conditions and it is uncertain whether an offer will ultimately be made".
