Big Food Group, owner of the Iceland supermarket chain, has announced it would recommend a 110p-a-share takeover of the group from the Icelandic group, Baugur, if a firm offer is made.

The company was forced to issue this statement by the Takeover Panel, which had asked the company to clarify its position following its current talks with Baugur.

Baugur already owns Hamleys, Oasis and Whistles and it has a 22% stake in Big Food Group. It is expected to decide whether to launch a final offer for the chain within the next four to six weeks.