The much discussed auction for the British discount supermarket chain Iceland Foods has been lengthened as two private equity funds who submitted bids have decided to extend their due-diligence process, .
BC Partners and Bain Capital put in fully funded bids at the end of January, believed to value the business at between GBP 1.4 billion and GBP 1.5 billion. The two companies were the last two bidders after Morrisons and Asda pulled out amid competition concerns – although both are reportedly still interested in buying individual branches.
BC Partners and Bain Capital were expecting to be told within days of the January deadline which of the two was to be named exclusive bidder.
Now people close to the deal say that BC Partners and Bain are doing extra checks on privalte information about Iceland Foods, including contracting information, before being asked to resubmit bids.
The delays mean that an exclusive bidder isn’t expected to be chosen for a fortnight but it is not yet clear exactly why the process has been extended.
UBS and Bank of AmericaMerrill Lynch are advising on the sale of the 77 percent stake in Iceland Foods held by by the resolution committees of bankrupt Icelandic banks Landsbanki and Glitnir.
Iceland Foods’ present management team, fronted by its founder and Chief Executive Malcolm Walker, is in charge of the remaining 23 percent of the retailer. Malcolm Walker holds what is called a a “last look” option, which means that he will have 40 days to match the leading offer when it is announced — although it is not yet clear whether he will be able to match a bid from the wealthy buyout firms.