The current management team of frozen food specialist Iceland reached an agreement last night with the owners of the retailer, which will give them the opportunity ahead of other bidders to buy the business.
Over the last couple of years the management team, led by CEO Malcolm Walker, has discussed a takeover with the liquidators of the consortium headed up by failed Icelandic bank Landsbanki which owns the grocery chain.
Walker had previously been given the assurance that if his team could match any other offer received for the business they would be considered the preferred buyer, but this new agreement will mean that other bids will only be countenanced if the management team can not first put together an acceptable deal.
Rival supermarket groups Asda & Morrisons have previously been linked to a potential offer for the firm, however it is understood that they would only be interested in acquiring stores from business and not continuing with the Iceland brand.
Commenting today Walker said: “I am delighted that the Icelandic banks have recognised the importance of management to the continuing success of the business, and have been supportive in giving us the exclusive right to pursue negotiations with them.
“I have every hope that we will be able to bring these to a successful conclusion within the coming weeks.”
A statement from Landbanki today confirmed the agreement with Walker and stated: “Landsbanki believes that this approach delivers the most certainty around sale completion whilst achieving the objective of maximising the proceeds from the sale of the shares.”
In an interview with Retail Gazette last year, Walker promised that in operational terms a management takeover would result in more of the same from the retailer, and questioned whether any outside bidder would be able to run the business better.
Last month Iceland saw its share of the UK grocery market leap to a ten-year high of 2.1 per cent, with the value business delivering strong trading at a time of squeezed consumer finances.
Walker added: “This agreement gives us a fantastic opportunity to achieve a deal that will be in the best long term interests of Iceland Foods, our 22,000 staff and the five million customers who shop with us each week.”
Iceland was founded in 1970 by Walker, and, aside from a four year period at the beginning of the last decade, he has led the retailer ever since.