Co-op to take over Somerfield

Somerfield, the privately-owned supermarket group, is said to be in exclusive talks with the Co-operative Group. The price tag for Somerfield is anticipated to around €2.1 billion and would represent one of the biggest corporate deals in the Co-op's history. This would give the group, led by Peter Marks, an additional 900 stores, taking its total portfolio to more than 3,100.

Bristol-based Somerfield went private in 2005 by a consortium of private equity groups Apax and Barclays Capital, and property tycoon Robert Tchenguiz. They improved the performance of the business and began looking for an exit last summer.  Somerfield, which has 42,000 staff, saw like-for-like sales growth of 6.4% in the 12 weeks to March 20.

A price tag of as much as €3.1 billion tossed around, but with the market for major corporate deals weak, and in light of potential competition issues for some larger retailers, the price has dropped considerably.

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