Somerfield board backs £1.1bn bid

A bid worth £1.1bn (€1.6m) for supermarket chain Somerfield was backed by the company’s board today.

The UK’s fifth biggest grocer agreed the terms with a consortium featuring property tycoon Robert Tchenguiz, private equity firm Apax Partners and investment bank Barclays Capital.

Ahead of a 5pm “put up or shut up” deadline from the Takeover Panel, the two sides said agreement had been reached on an offer worth 197p a share, but that financing still needed to be resolved.

A further announcement will be made later today, before the proposal is put before the company’s shareholders.

The agreement looks set to end a takeover saga stretching back to February, when retail investment group Baugur made an £1bn (€1.46bn) offer.

That was rejected by Somerfield, which later received approaches from the Tchenguiz consortium and a group headed by property group London & Regional.

It is thought the Tchenguiz party first proposed 205p a share, but this price slipped as general trading conditions worsened and London & Regional pulled out to leave just one potential suitor.

Rhys Williams, research analyst at Seymour Pierce stockbrokers, said: “An offer of 197p a share is not as good as initially expected but considering the downside of the bid being rejected, we believe it will go through.”