A fraud charge against the executives of the Icelandic company Baugur may bring the GBP 1.1 billion bid approach for the UK supermarket group Somerfield in danger. Other members of the four-company consortium of which Baugur is a member have threatened to pull out.
According to the Financial Times, they have demanded that founder and chief executive of Baugur, Jon Asgeir Johannesson, should leave the consortium following his being charged by Icelandic police last week. If he does not comply, they have threatened to leave themselves. The consortium consists of Baugur, Barclays Capital, private equity firm Apax Partners and property entrepreneur Robert Tchenguiz.
Insiders have said that some of the consortium members are now concerned about being linked with Jon Asgeir Johannesson and his family, who own 70 per cent of Baugur. Six members of his family have been charged, including his father and sister. All six parties have denied the charges, the details of which have not yet been made public. Johannesson is supposed to be picking up the documents that support the indictments in Reykjavik today.
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The consortium is one of the biggest purchasers of UK retail assets. It recently bought Karen Millen, Whistles and Hamleys. This year it bought the Big Food Group, which owns supermarket chain Iceland. Although Baugur’s absence from the consortium would be damaging, it would not be debilitating. Insiders said the bid would go ahead without Baugur.
In the meantime, Somerfield is deliberating. Another bidder, the property group London Regional – together with Japanese bank Nomura – is also still in the running. Formal bids from both companies are expected from next month.