Failed Icelandic bank Landsbanki is to formally kick off the sale of its majority stake in Iceland Foods, the UK frozen food retailer.

The bank’s resolution committee, which is managing the sale of Landsbanki’s assets, said yesterday (19 May) that it had “decided to launch a formal sales process” for the 67% stake in Iceland Foods.

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The committee has appointed UBS and Bank of America Merrill Lynch as advisers over the sale. The advisers had informed the committee that “market conditions are currently favourable and it is therefore advisable to commence the sales process”.

Landsbanki indicated in January that “some parties” had expressed an interest in its stake in Iceland but declined to name the suitors.

Last autumn, reports in the UK said Iceland Foods’ founder and current CEO Malcolm Walker, who already owns 24% of the retailer, had offered GBP1bn (US$1.62bn) to buy out Landsbanki.

A report in The Financial Times said today that the committee would be looking at a price tag of GBP1.8-2bn.

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A source familiar with the situation would not comment on a price but said the disposal of Landsbanki’s stake was “by no means a fire sale” and that the committee was looking for the best price possible.

Sainsbury’s has reportedly indicated that it would take a look at Iceland Foods once Landsbanki begins the sale process.

This week, The Co-operative Group, the UK’s number five grocer, said it would not be keen on buying the whole of Iceland Foods but would consider individual sites.