Iceland boss defiant in bid to buy out investor

Officials responsible for winding up failed Icelandic bank Landsbanki last month launched an auction for a 67 per cent stake in Iceland Foods, fuelling speculation that British grocers would line up to buy the chain or break it up.

Mr Walker, who, with other managers, owns about 23 per cent of the business, said he had no plans to sell, as the chain reported a 15 per cent rise in full-year profit.

“Why would I sell? This is my job,” he said in an interview. “The last thing that will happen is that the company will be broken up.”

Mr Walker, who founded Iceland Foods in 1970 and recently climbed Mount Everest to raise money for charity, said he was confident of raising funds to buy out Landsbanki, which took control of its stake following the collapse of Icelandic investment group Baugur.

“Financing is easy as far as we are concerned,” he said, adding the business was doing well and conditions in capital markets were improving.

Mr Walker has tabled a bid for Landsbanki’s stake which values all of Iceland Foods at about £1bn and has a pre-emption right to match any other bid.

Some analysts believe the whole business could fetch more than £1.5bn.

There has been speculation that Leeds-based Asda and Bradford-based Wm Morrison might be interested in bidding for Iceland. Yesterday spokesmen for Morrisons and Asda said they never commented on speculation.

RBS analyst Justin Scarborough said any bidder could face a battle to take Iceland from the current management who “know the business inside and out and should still be in a strong position to become the ultimate owners”.

Mr Scarborough said a purchase of all 796 of the group’s shops would probably lead to a probe by competition regulators and some disposals.

Iceland Foods, whose current advertising campaign features reality television personality Stacey Solomon, said it made a profit before tax and one-off items of £155.5m in the year ended March 25.

Mr Walker said pressure on consumer budgets from rising inflation and austerity measures was helping Iceland Foods, which has a focus on low-priced goods.

He said it was also benefiting from over 200 new products introduced during the year like ‘noodle bowl’ frozen ready meals.