Anne Bruce
City analysts predict the Big Food Group's newest shareholder Baugur will mount a full takeover bid for the company in the next year.
The Icelandic retailer, which has built up a 14.99% stake in BFG, "is looking at possibilities in the UK market and will see what happens," said a spokesman.
It was forced to pull out of a joint bid for clothing giant Arcadia earlier this year.
But analyst Mike Dennis of CAI Cheuvreux said: "This is not co-operative or strategic. Baugur worked with former Booker management on the Arcadia deal. It must have a good idea of the value of Booker." He said if Baugur bought BFG, it could spin off the Booker business, possibly through a management buyout. Arcadia chief executive Stuart Rose and executive director Charles Wilson, formerly of Booker, could be in the frame.
Dennis added: "Stuart Rose could buy Booker back, making a handsome profit."
But an analyst cautioned: "Of the three parts of BFG, Booker is where most of the value lies. BFG will not be keen to sell off the bit with a bright future."
City sources suggested that following a successful takeover, Baugur could use Iceland's 700-plus sites to introduce its Bonus general merchandise format to the UK, which it has already exported to America. One analyst commented: "The Iceland brand won't be a loss on the high street  it has already been diluted with Extra and Iceland.co.uk formats."
But another pointed out that Baugur was not in good shape for expansion as it had just issued a profit warning and lost its chief executive. But he added: "The key thing is that this is the first external vote of confidence BFG has had in a long time."
Big Food Group chief executive Bill Grimsey said in a statement: "Baugur has recognised the inherent value within The Big Food Group and has taken the opportunity to buy a significant stake."
Taylor Nelson Sofres data indicates Iceland has a 2% share of the grocery market in the 12 weeks to October 13 2002, with sales down 9% on the same quarter in 2001.
n Iceland has appointed Nick Canning as its new marketing director, replacing Sara Jamison.
{{NEWS }}
City analysts predict the Big Food Group's newest shareholder Baugur will mount a full takeover bid for the company in the next year.
The Icelandic retailer, which has built up a 14.99% stake in BFG, "is looking at possibilities in the UK market and will see what happens," said a spokesman.
It was forced to pull out of a joint bid for clothing giant Arcadia earlier this year.
But analyst Mike Dennis of CAI Cheuvreux said: "This is not co-operative or strategic. Baugur worked with former Booker management on the Arcadia deal. It must have a good idea of the value of Booker." He said if Baugur bought BFG, it could spin off the Booker business, possibly through a management buyout. Arcadia chief executive Stuart Rose and executive director Charles Wilson, formerly of Booker, could be in the frame.
Dennis added: "Stuart Rose could buy Booker back, making a handsome profit."
But an analyst cautioned: "Of the three parts of BFG, Booker is where most of the value lies. BFG will not be keen to sell off the bit with a bright future."
City sources suggested that following a successful takeover, Baugur could use Iceland's 700-plus sites to introduce its Bonus general merchandise format to the UK, which it has already exported to America. One analyst commented: "The Iceland brand won't be a loss on the high street  it has already been diluted with Extra and Iceland.co.uk formats."
But another pointed out that Baugur was not in good shape for expansion as it had just issued a profit warning and lost its chief executive. But he added: "The key thing is that this is the first external vote of confidence BFG has had in a long time."
Big Food Group chief executive Bill Grimsey said in a statement: "Baugur has recognised the inherent value within The Big Food Group and has taken the opportunity to buy a significant stake."
Taylor Nelson Sofres data indicates Iceland has a 2% share of the grocery market in the 12 weeks to October 13 2002, with sales down 9% on the same quarter in 2001.
n Iceland has appointed Nick Canning as its new marketing director, replacing Sara Jamison.
{{NEWS }}
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