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BRISTOL, England -- Somerfield Plc, the U.K. owner of Kwik Save and Somerfield supermarkets, said yesterday that it has received a $1.85 billion takeover approach from Baugur Group, an Icelandic retailer. If approved, the transaction would create Britain's No. 5 food retailer.
Baugur, part of an investor group that last month acquired supermarket chain Big Food Group Plc, plans to offer 190 pence a share in cash for Somerfield, according to published reports.
Baugur, based in Reykjavik, Iceland, may be seeking to combine the supermarket chains to put the businesses in a stronger position to compete with Tesco Plc and Wal-Mart Stores, Inc.'s Asda chain, according to analysts.
The proposal by Baugur, Iceland's biggest retailer, is subject to conditions including access to Somerfield's accounts, bid financing, and pension funding, Somerfield said.
Somerfield operates 700 Somerfield stores and more than 500 Kwik Save stores across Britain.