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Baugur to break up Big Food kingdom

13 April 2012

BAUGUR wants to break up Big Food Group and is holding talks to sell around 500 of the 750 Iceland food stores to former frozen food boss Malcolm Walker.

The Reykjavik retailer has started poring over BFG's books to assess whether to proceed with its proposed 110p-a-share bid. BFG said it would recommend an offer at this level.

Walker was ousted from retailer Iceland in 2001 after a controversial share deal. He wants to revive the chain he founded 30 years ago.

Baugur could hive off the best of the Iceland stores to supermarkets such as Tesco and sell the rest to Walker for a small sum.

Baugur already owns a 22% stake in BFG, bought at around 40p-47p per share. Analysts reckon this may deter rival bidders.

Private equity firms would be interested in the Booker cash and carry arm and Woodward food business which generate lots of cash. BFG fell 4 1/4p on Monday to 98 1/2p.

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