Iceland founder and chief executive Malcolm Walker said he does not need funding from a private equity backer to take full control of the frozen food retailer, which is being circled by rivals.
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Walker told Retail Week: “Our first choice is to gain full control of the business. We don’t need the backing of another private equity firm, we have the funding in place from the banks, but obviously it depends on the price.”
Walker, who has just returned from climbing Mount Everest to raise money for Alzheimer’s Research UK, said he will do all he can to keep Iceland “an independent, autonomous business under the current management”.
The winding-up committee of failed Icelandic bank Landsbanki has put its 67% Iceland stake up for sale and appointed Merrill Lynch and UBS as advisers. Walker and Iceland’s management own a 23% stake and the remaining 10% is controlled by the resolution committee of Glitnir, another bust Icelandic bank. Walker, who last year tabled a £1bn offer to buy the whole company, has the right to match any offer for Iceland.
Earlier this week it emerged Morrisons was eyeing Iceland. Morrisons finance director Richard Pennycook and strategy director Gordon Mowat have met potential advisers but their interest is at a preliminary stage.
A bid for Iceland would propel Morrisons’ market share close to both Asda and Sainsbury’s. It would also give the grocer a swathe of high street convenience stores and more shops in the south of England - two of the key growth areas identified by chief executive Dalton Philips.
Nomura analyst Nick Coulter said: “Although we think Morrisons, alongside Asda, would see a reasonable demographic fit with the Iceland store catchments, the success of any deal would be contingent on the delivery of the sales uplifts from overlaying a Morrisons’ offer on the Iceland stores.”
It is understood that other grocers such as Sainsbury’s could be interested in some Iceland stores if the chain is broken up.
Morrisons has bought two more former Netto stores from Asda. The latest acquisitions are in Worsley, Manchester and Dunstable, Bedfordshire. The acquisitions add to the 16 former Netto stores that Morrisons bought from Asda in January, the first of which began trading as Morrisons earlier this month.