United weigh up Somerfield offer

UNITED Co-operatives is weighing up an audacious bid for the 1,250 food stores in the Somerfield/Kwiksave chain.
United, Britain&#039s largest independent co-op with 942 trading outlets including 509 food stores, has announced that it has made an approach to the board of Somerfield plc with a view to exploring the possibility of making an offer for the business.
United and their advisers Rothschild are currently carrying out due diligence procedures and it is understood this process may take several weeks.
A statement issued from United&#039s Rochdale headquarters said: "There can be no certainty that an offer will be made. A further announcement will be made in due course."
If a bid by United is successful, it would put the society on par with the Co-operative Group in terms of food store numbers and into the UK&#039s top five food retailers.
United Chief Executive Peter Marks commented: "We&#039re at a very early stage, but we have been looking at making a bid internally for some time. An offer makes a lot of sense for us because there are so many similarities between our business and Somerfield."
Ironically, Somerfield made national headlines last autumn when a leaked internal document ? later withdrawn ? offered staff bonuses if they could help close their local Co-op store.
United recently announced sales of &#163 1.9 billion and trading profits of &#163 50 million for the year ended 22nd January.
At the same time, the society said it planned to spend "at least" &#163 200 million on acquisitions and developments over the next three years.
Retail analysts value Somerfield at around &#163 1 billion and shares in the business have jumped by 4.5p to 202p following United&#039s reported interest and the prospect of an auction involving other potential bidders, possibly including Asda.