Morrisons prepares £1.5bn Iceland takeover
Morrisons is the frontrunner in the race to buy Iceland, currently valued at £1.5bn, according to reports.
Richard Pennycook, Morrisons’ group finance director has held meetings with investment banks to advise on the bid for Iceland ahead of an auction for the 750-strong chain, say national newspapers.
Iceland’s biggest shareholder, the failed Icelandic bank Landsbanki, hired UBS and Bank of America Merrill Lynch to find a buyer for its 67% stake in the supermarket earlier this month.
Rival supermarket chains Sainsbury and Asda are also reported to be interested in buying the majority stake in the frozen food retailer.
An Iceland takeover would boost Morrisons’ convenience store drive and would increase the company’s market share by about 2% to 14% – bringing it nearer to its closest rival, Sainsbury’s, which has a 16% share of the sector.
A Morrisons takeover is likely to face opposition from Iceland chief executive Malcolm Walker who owns 26% of the company and made a £1bn bid for the remainder he does not already own last year.
Morrisons has pledged to invest £3bn in its stores, own label ranges and the development of online platforms over the next three years.
X Factor finalist Stacey Solomon was recently appointed as the new face of Iceland, following previous brand ambassadors Jason Donovan and Kerry Katona, who was dropped in 2009 after she was caught using drugs.
