Iceland 'welcomes' ousted chief

MALCOLM Walker, controversially ousted from frozen-food chain Iceland more than three years ago, is in line to buy some or all of its stores after a proposed £377 million bid for parent company Big Food Group.

Icelandic retailer Baugur has signalled it may pay 110p a share for BFG. And, according to bankers close to the deal, Baugur is weighing up plans to offer Walker Iceland's 750 stores. Baugur already has 22% of BFG.

Walker was deposed as chairman in January 2001 after Iceland merged with cash-and-carry operator Booker and before it became BFG.

The previous month, he had sold £13.5 million worth of shares in the company and was forced out when new chief executive Bill Grimsey issued a dramatic profits warning.

Until then, Iceland had suffered only one profits fall in the 30 years since Walker founded the retailer. Since Grimsey took over, sales have slumped. Latest figures show falls of 3.8% at Iceland and 4.1% at Booker. After being ousted from Iceland, Walker started his own frozen food chain, Cool Trader.

If Baugur captures BFG, it is not clear whether it would hold on to Booker or sell it to a venture capitalist. The third leg of BFG's operations, catering supplier Woodwards, could be sold to a rival such as Brake Brothers.

Despite BFG's decline, Grimsey and his fellow executives hold huge numbers of shares under a boardroom incentive scheme. It is believed this covers about 7.5 million shares - worth more than £8 million if a bid succeeds at 110p a share.

If BFG is taken over, Grimsey and his long-time ally, finance director Bill Hoskins, would be entitled to three-quarters of their incentive plan shares - whether or not performance targets have been met.