Baugur bid for Somerfield still on cards

ICELANDIC retailer Baugur may still launch a £1bn-plus bid for Somerfield despite the supermarkets group's refusal last week to open up its books.

Baugur said today that it is 'reviewing its options with respect to Somerfield, one of which includes a possible offer'. But it made it clear that if it does decide to go ahead, it will be seeking a recommendation from the board. It said a further announcement would be made when appropriate.

Somerfield rejected the indicative 190p-a-share offer last week, saying that while it had given 'careful consideration' to the approach, there was no certainty that an offer would be forthcoming at an 'appropriate level'.

But the Baugur camp believes the door may still be open for an agreed deal, noting that it was not an emphatic rebuttal and did not include any mention of the terms being too low.

Baugur hopes to meet the Somerfield board, which is reluctant to open up its books to Baugur because the Icelandic firm has just taken control of rival retailer Big Food Group, owner of the Iceland frozen foods chain.

Somerfield shares ended last week at 187p, just below the proposed bid terms, indicating that the market believes a bid may still be on the way.

Baugur is the biggest food retailer in Iceland and has made a series of acquisitions in the UK High Street over the past couple of years, including toy store Hamleys, the Whistles, Karen Millen and Oasis fashion chains and the Goldsmiths jewellery chain.