Co-op pulls up in race for Somerfield

UNITED Co-operatives has pulled out of the race to buy supermarket group Somerfield. The Somerfield board said the Co-op had decided not to make an offer for the company but that it was still in talks with other potential suitors.

The Co-op was one of three parties considering a bid for Somerfield, all believed to be worth around 205p a share, or £1.12bn.

The others are a consortium of Icelandic investor Baugur with property mogul Robert Tchenguiz, a partnership of British buyout firm Apax and investment bank Barclays Capital, and another group led by property tycoons Ian and Richard Livingstone.

The Co-op, which has 942 stores throughout the UK, had earlier admitted approaching Somerfield's board with the view to making an offer.

Somerfield, which owns more than 700 Somerfield and 520 Kwik Save stores, had also been linked with property group Topland and Asda. However, both are believed to have backed away from a bid.

Shares in Somerfield closed at 190p last night, well below the 218p achieved in early April when the first bid approaches were made.

The United Co-op is the UK's largest independent co-operative society, employing 15,500 staff, and achieved sales of £1.9bn last year. It was formed in 2002 following the integration of United Norwest and Yorkshire Co-operatives. It has five major businesses - food, travel, motor dealerships, healthcare and funerals.