Make or break for Baugur's BFG deal

NORDIC investment group Baugur is haggling for a make or break £50m cut in its deal to buy ailing retailer Big Food Group. The move was revealed by sources close to the talks, which hang in the balance this weekend.

Baugur, which owns 22% of BFG, signalled in September that it was preparing to bid 110p a share for the retail group, parent of 750 High Street Iceland stores and Booker cash-and-carry. That valued BFG at £378m.

But BFG chief executive Bill Grimsey has since revealed that sales are continuing to fall and the company made a loss in the first half of its financial year.

The two sides are arguing over price in the 90p to 95p-a-share range, according to bankers close to the talks. That would value BFG at up to £326m.

Baugur and BFG had hoped to strike a deal by the middle of this month, but now they are looking at the second week in December - if talks do not collapse. Grimsey has told friends that he is eager to find a face-saving exit from the company, having failed to revive its fortunes since taking the helm nearly four years ago.

But financial backers of the bid fear the deal may collapse as an offer above 90p a share may not be viable.