Founder Walker moving ahead in race for Iceland

RISING concerns over competition laws could clear the way for Iceland Foods founder Malcolm Walker to take control of the supermarket once again.

Walker, the chief executive, has moved ahead in the race because Iceland is believed to be worried that a deal with another retailer would not be approved by the Competition Commission.

Last week Asda dropped out of the auction for a controlling stake but the Walmart-owned chain remains interested in buying a smaller number of its stores.

Its decision could leave Walker, who together with other managers owns 23 per cent of Iceland, to battle high street rival Morrisons and private equity firms BC Partners and Bain Capital.

Morrisons is interested in buying all of Iceland’s 730 stories and could then sell on around 200 branches to Waitrose, Farmfoods and The Co-operative

The acquisition would help Morrisons strengthen its presence in London and expand into the convenience store market.

Iceland Foods had a strong Christmas, with sales at stores open over a year rising at least five per cent. Its market share rose to two per cent in the 12 weeks through December 25 from 1.9 per cent a year earlier, according to research firm Kantar Worldpanel.

Landsbanki and Glitnir, the failed Icelandic banks, are selling a 77 percent stake in the supermarket. Analysts have estimated the value of a deal at £1bn to £1.5bn but the banks believe a deal could be done at the top of that bracket.

Last month private equity firm TPG was dropped from the auction because its bid was too low.

Morrisons and BC Partners declined to comment and Bain Capital and Iceland could not be reached.