Home News Business News

Iceland Foods, based in Deeside, in talks over Middle East takeover

THE owners of frozen food retailer, Iceland, are in talks with Middle East investors over a potential sale of the chain for up to £1.5bn.

A consortium headed by the Global Banking Corporation of Bahrain, is holding early-stage discussions on a takeover of Deeside-based Iceland, according to reports at the weekend.

It is thought the move could fuel interest from Iceland founder and chief executive Malcolm Walker, who already owns 24% of the company, alongside other members of management.

Iceland is majority-owned by collapsed Icelandic banks Landsbanki and Glitnir, together holding a 76% stake, although their assets have been owned by the Icelandic government since the banks called in administrators.

Mr Walker is said to have made a £1bn bid to buy back Iceland earlier this year, which was rejected. But he may be spurred on to table a new offer in light of the current reported talks.

Mr Walker founded Iceland in Oswestry in 1970 and initially specialised in loose frozen food, including frozen pizzas.

By 1975 there were more than 15 Iceland outlets in North Wales, with the first supermarket-style outlet opening in Manchester a couple of years later.

The firm’s head office moved to Deeside in 1979. Iceland was floated on the London Stock Exchange in 1984, by which stage it had 81 outlets.

Walker was ousted as chairman in 2001, after the company released a profits warning just days after he sold £13.5m-worth of shares.

He was later cleared of any wrongdoing by the Serious Fraud Office.

Mr Walker was reinstated to the board in 2005 when a private consortium headed by Icelandic retail group Baugur acquired Iceland’s then parent company The Big Food Group for £326m.

Baugur hit the wall last February during the Icelandic financial crisis and the controlling stake passed to the administrators of Landsbanki and Glitnir.

However, Iceland’s ownership saga has not damaged its performance, with the group announcing a 19% jump in profits for the year to March 26.

Like-for-like sales at Iceland Foods stores open for more than a year rose 4.3% in the year and helped total sales climb 10.4% to £2.2bn.