Violet Acquisitions, a bid vehicle consisting of Apax Partners, Barclays Capital and the Tchenguiz Family Trust, has announced that it has reached agreement with Somerfield on terms of a takeover bid for the UK grocery retailer.
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The 197p per share offer values Somerfield at £1.08bn (US$1.90bn). Somerfield incorporates the Somerfield and Kwik Save supermarket business units which together operate over 1,300 stores nationwide. The Somerfield estate includes convenience stores and forecourts and grew to 814 stores in the last financial year. It is focused on smaller, more convenient retail formats. Kwik Save, with nearly 500 stores, is one of the UK’s biggest discount supermarkets.
“Over the past five years, Somerfield has made good progress in its recovery programme in an increasingly competitive retail environment. The proposals provide shareholders with the ability to crystallise the value that has been achieved at a premium to the historical share price. We believe that the proposals represent fair value for the business and its prospects, and after careful consideration, the independent directors are unanimous in recommending to shareholders that they vote in favour of the proposals,” said Somerfield chairman John von Spreckelsen.
John Lovering, who is to become chairman of the Violet Group, said: “I am delighted to have this opportunity to lead this strong executive team through the challenges and opportunities we will face in moving Somerfield forward.”
Steven Back, chief executive of Somerfield, said the takeover proposal represented a “tremendous opportunity” for the management team.
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By GlobalData“Our staff, management and suppliers now have certainty and we can continue to deliver the strategy we have commenced and look forward to the next stages of its development. With the expertise of John Lovering and the support of our new investors, the company has a great future,” Back added.
