LONDON-Property tycoon Robert Tchenguiz and Icelandic retailer Baugur have teamed up to launch a joint bid for supermarket chain Somerfield. "The consortium is well-placed to put forward a proposal that we believe the board of Somerfield will find attractive both in terms of value and deliverability," Baugur and Tchenguiz' say in joint statement. "The consortium believes that the current management team has made substantial progress with the business, and we are excited by the prospect of investing in Somerfield to continue its growth and development."
It is still not know how much R20--the joint venture's formal name--will bid but it is expected to be in excess of a previous Tchenquiz bid of euro 1.6 billion ($2.1 billion) that was rejected by the Somerfield board. Prior to the joint venture, Bauger also made an unsuccessful run at Somerfield.
If the bid is a success, Baugur is expected to focus on the retail operation while Tchenguiz will turn his attention to the group's undervalued property portfolio. Last year's report valued the portfolio at ($1.5 billion), but the last revaluation was in 1996.
The forming of a joint venture--which also includes Barclays Capital and Apax Partners--means R20 will now face Ian and Richard Livingstone's London & Regional Properties in the battle for the chain. Topland Estates is also thought to be considering a bid for the group.
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