Shares in Britain's B&M rise on report Asda eyeing takeover bid

Paterniano Del Favero
Luglio 24, 2017

Shares in B&M rose sharply on Monday following weekend reports that supermarket giant Asda is mulling over a £4.4 billion takeover of the discount retailer.

The newspaper said Asda, which trails market leader Tesco (TSCO.L) and Sainsbury's (SBRY.L) in annual sales, is in the early stages of assessing a bid for B&M, which is chaired by Terry Leahy, the former chief executive of Tesco.

It said Asda had commissioned external research on B&M and cited an unidentified industry source as saying that buying B&M would reduce Asda's reliance on food sales and provide it with a network to stock its George clothing range.

A spokesman for Asda declined to comment.

Its shares listed at 270 pence in 2014.

The Sunday Times said applying a normal takeover premium would take its price to at least 4.4 billion pounds. B&M trades from over 540 United Kingdom stores, selling products ranging from bedding to barbecues to food.

The Times noted that such a move by Asda would be part of an effort by United Kingdom supermarkets to diversify away from food, in the face of the challenge from German discounters Lidl and Aldi.

The struggling grocer, which has endured 11 consecutive quarters of declining sales, could be the latest supermarket to expand its estate in a high-profile takeover. J Sainsbury PLC bought the catalogue retailer Argos for GBP1.4 billion past year and is in talks to acquire the convenience store chain Nisa for GBP130 million.

Asda is due to publish second quarter results on August 17.

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