Baugur leads Big Food takeover

BIG Food Group, owner of Booker cash and carry and Iceland frozen foods, has agreed terms of a £326m takeover from a consortium led by the ambitious retailer Baugur. The business will be broken up, with Iceland sold to a separate consortium, including Baugur and other Icelandic investors. A new management team, led by Iceland founder Malcolm Walker, will be brought in to run the ailing business.

Scottish entrepreneur Tom Hunter, a close friend of Bhs billionaire Philip Green, is a surprise member of the bid team and, along with Baugur and other investors, will buy the property assets of Big Food Group. He is thought to have invested around £30m.

Another member of the bid consortium is Kevin Stanford, who founded the Karen Millen fashion chain but sold out to Baugur earlier this year.

Terms of the bid are 95p a share, a reduction on the initial offer indicated by Baugur a few months ago. Since then, trading at Iceland has deteriorated and the group's pension deficit spiralled to almost £200m.

Baugur chief executive Jon Asgeir Johannesson said: 'In an increasingly competitive UK marketplace, we believe these businesses are more appropriate for the private domain.'

Baugur already holds 22% of Big Food and the company's institutional shareholders are backing the deal. Big Food chief executive Bill Grimsey advised other shareholders that the terms represented 'fair value'.