INTERNATIONAL NEWS
LONDON -- Somerfield plc, Britain's fifth-largest supermarket operator, said United Co-operatives Ltd., the owner of Co-op Late Shop convenience stores, dropped out of talks on a possible takeover.
Discussions with other potential bidders continue, spokeswoman Sofia Rehman said. According to Bloomberg News, the Bristol, England-based grocer is in talks with suitors led by Baugur Group HF, Iceland's largest retailer, and London & Regional Properties Ltd., owned by millionaire investors Ian and Richard Livingstone.
Somerfield's real estate and cash flow make the company an attractive takeover target, according to analysts including Tim Attenborough of BNP Paribas in London. The food retailer, which owns the Somerfield and Kwik Save chains, had property with a net book value of 543.3 million pounds ($990 million) as of April 2004.
“It's probable that the Cooperative couldn't match the bids of the other two parties, who are pretty big and wealthy,'' said Bryan Roberts, an analyst at Planet Retail in London. “Baugur looks the strongest player in the battle, as it has a number of strong financial backers.''
United Co-operatives said on May 6 it may bid for Somerfield to add the grocer's 600 outlets to its own 400 convenience stores. Baugur said the prior month it was joining with Apax Partners Worldwide LLP, Barclays Capital and millionaire investor Robert Tchenguiz to offer 205 pence a share for Somerfield.
All interested parties have since been in due-diligence discussions with the grocer.
Somerfield is the latest U.K. retailer to attract takeover interest after Safeway plc, Debenhams plc and Selfridges plc were bought in the last two years. The grocer has spent the past two years refurbishing stores in an effort to boost sales and stand out from competitors such as Tesco plc, Britain's largest supermarket operator, by becoming a convenience retailer.
The convenience market is one of the fastest-growing parts of Britain's food-retailing industry. U.K. shoppers spend about 20 percent of their food and beverage money at such stores, according to Datamonitor.
In other news from the United Kingdom, Tesco's hold on the supermarket sector hit new heights when figures showed its market share broke through the 30 percent mark for the first time.
The country's biggest supermarket held a record 30.3 percent share of the U.K. grocery market in the 12 weeks to June 19, according to market research group TNS Superpanel.
It followed a year in which the group became the first U.K. retailer to post annual profits of £2 billion.
The chain, which receives £1 out of every £8 spent in the United Kingdom, has been enticing customers into its stores with non-food products such as CDs and DVDs.
It has also been increasing its presence in the convenience store sector by snapping up smaller operators.
The new figures also showed the group's closest rival Asda virtually unchanged on last year with 16.4 percent of the market.
It was followed by Sainsbury's, rising to 15.9 percent from 15.6 percent a year ago.
Discussions with other potential bidders continue, spokeswoman Sofia Rehman said. According to Bloomberg News, the Bristol, England-based grocer is in talks with suitors led by Baugur Group HF, Iceland's largest retailer, and London & Regional Properties Ltd., owned by millionaire investors Ian and Richard Livingstone.
Somerfield's real estate and cash flow make the company an attractive takeover target, according to analysts including Tim Attenborough of BNP Paribas in London. The food retailer, which owns the Somerfield and Kwik Save chains, had property with a net book value of 543.3 million pounds ($990 million) as of April 2004.
“It's probable that the Cooperative couldn't match the bids of the other two parties, who are pretty big and wealthy,'' said Bryan Roberts, an analyst at Planet Retail in London. “Baugur looks the strongest player in the battle, as it has a number of strong financial backers.''
United Co-operatives said on May 6 it may bid for Somerfield to add the grocer's 600 outlets to its own 400 convenience stores. Baugur said the prior month it was joining with Apax Partners Worldwide LLP, Barclays Capital and millionaire investor Robert Tchenguiz to offer 205 pence a share for Somerfield.
All interested parties have since been in due-diligence discussions with the grocer.
Somerfield is the latest U.K. retailer to attract takeover interest after Safeway plc, Debenhams plc and Selfridges plc were bought in the last two years. The grocer has spent the past two years refurbishing stores in an effort to boost sales and stand out from competitors such as Tesco plc, Britain's largest supermarket operator, by becoming a convenience retailer.
The convenience market is one of the fastest-growing parts of Britain's food-retailing industry. U.K. shoppers spend about 20 percent of their food and beverage money at such stores, according to Datamonitor.
In other news from the United Kingdom, Tesco's hold on the supermarket sector hit new heights when figures showed its market share broke through the 30 percent mark for the first time.
The country's biggest supermarket held a record 30.3 percent share of the U.K. grocery market in the 12 weeks to June 19, according to market research group TNS Superpanel.
It followed a year in which the group became the first U.K. retailer to post annual profits of £2 billion.
The chain, which receives £1 out of every £8 spent in the United Kingdom, has been enticing customers into its stores with non-food products such as CDs and DVDs.
It has also been increasing its presence in the convenience store sector by snapping up smaller operators.
The new figures also showed the group's closest rival Asda virtually unchanged on last year with 16.4 percent of the market.
It was followed by Sainsbury's, rising to 15.9 percent from 15.6 percent a year ago.