Walker to bid £1bn for food firm Iceland

THE boss of frozen food chain Iceland is planning a £1bn takeover of the firm he founded four decades ago, although he faces a potential bid battle, it emerged yesterday.

Malcolm Walker, who together with other managers owns about a quarter of the retailer, is thought to have offered to buy the remaining 76 per cent stake in the group from Icelandic banks Landsbanki and Glitnir, although no-one from Iceland was yesterday available to comment.

Walker is understood to be facing a rival bid of £1.4bn for the company from a mystery investment fund.

If successful, the move would mark a comeback for Walker, who founded Iceland in 1970 with one shop in north-west England, but controversially quit the group more than three decades later.

The tycoon was ousted as executive chairman in 2001 following an investigation into share-dealing by the Serious Fraud Office (SFO).

The SFO cleared Walker of any wrongdoing, although the probe is said to have left the tycoon bitter about his treatment by the group and his successor Bill Grimsey.

Walker returned to head the chain after Icelandic retail group Baugur, which also owns toy retailer Hamleys and department store group House of Fraser, took it private in 2005.

Walker is understood to have approached lenders Landsbanki and Glitnir, who seized control of the company from Baugur last year, about the potential deal four months ago. He is thought to have backing from banks, rather than private equity groups, for the proposed deal.

In March, the group had 776 stores including 730 Iceland shops and 46 under the Cooltrader brand.

In June, it announced an 11 per cent rise in annual earnings to £184.2million and a 19.4 per cent increase in pre-tax profit to £135.4million on a 10 per cent lift in sales to £2.26billion.

It opened 74 stores in the year to March 26 including 51 former Woolworths stores, creating more than 2,500 jobs.

MALCOLM WALKER,
CHIEF EXECUTIVE,
ICELAND
MALCOLM Walker’s bid to buy back Iceland is the latest chapter in the career of an entrepreneur fast gaining a reputation as a comeback king.

Walker was born in Yorkshire in 1946 and became a trainee manager at now-collapsed high street chain Woolworths after leaving school.

He founded Iceland in 1970 with a small shop in Oswestry selling loose frozen food with capital of just £30.

He quit Woolworths in 1971 after it found out about his frozen food business, but he expanded Iceland nationwide by 2000.

After buying cash and carry firm Booker in April 2000, Iceland built up sales of £5.5bn.

Walker was ousted from the business in 2001, but founded frozen food retailer Cooltrader.

In February 2005, he returned to Iceland as part of the consortium that took the company private.

Walker received a CBE in 1994. He is married with three children and lives near Chester. His other business interests include food manufacturing and property and he likes gardening, skiing, sailing and shooting.

TIME LINE | THE ICELAND STORY
1970 – Malcolm Walker and a business partner open first Iceland store in Oswestry, Shropshire.

1975 - Walker and partner quit Woolworths and begin developing Iceland to the point where they had 15 stores in North Wales and north-west England.

1984 – Iceland goes public with flotation.

1989 – After buying smaller freezer centre chains, group buys rival Bejam, creating national chain with 465 stores.

1996 - Iceland reaches 752 stores, but facaes stronger competition as government allows supermarkets to open on Sundays for the first time.

2000 – Iceland buys cash-and-carry chain Booker, Walker becomes executive chairman after chief executive Sir Stuart
Rose leaves to head Arcadia.

2001 – New chief executive Bill Grimsey joins, and Malcolm Walker is ousted as chairman.

2003 – Group renamed Big Food Group.

2005 – BFG taken private by consortium headed by Icelandic retailer Baugur, Walker returns to head Iceland.

2009 – Baugur loses control of Iceland. Icelandic banks Landsbanki and Glitnir now own about three-quarters of the frozen food chain with the rest owned by Walker and other managers.