Co-op Set To Capture Somerfield For £1.6 Billion
In a move which will push the Co-operative movement back into the big league, rumours are swirling around the City that the company is set to announce the £1.6 billion acquisition of the Somerfield group. Somerfield was recently taken private by a group of venture capital investors and well known property tycoon Robert Tchenguiz in a £1.1 billion buy-out.
After restructuring the group over the last 3 years the consortium had been expecting to sell the business on for up to £2.5 billion, but the credit crunch led to a sharp fall in the price. The deal seems to have been ongoing for some time and ASDA apparently made a high conditional offer last year, only to be rebuffed by the Somerfield board.
The move will add another 900 stores to the Co-op portfolio, bring the number of stores to over 3,000 and an 8% share of the market. This will close the gap on Morrisons and with a £1.5 billion investment program ongoing in Co-op stores, it seems as though the group is ready to make a major play for Morrisons position in the market. Many are predicting a return to the days of the 1960s when the Co-op was the leader on the high street and the first port of call for many shoppers.
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