Baugur Group has decided to withdraw from the consortium that is considering making an offer to the retail chain Somerfield. The daily Morgunblaðið received the following press release from Baugur just after eight tonight.
Press release from Baugur Group
Baugur withdraws from the Somerfield bid
London, July 8, 2005 – Baugur Group has confirmed its decision to withdraw from the consortium that has been in discussions with Somerfield about acquiring the company.
The decision was made in order to defend the best interest of the consortium, its members, and the shareholders in Somerfield, after official charges were presented to the CEO of Baugur and five other individuals. Baugur gives its full support to these individuals who have consistently maintained their innocence.
Hreinn Loftsson, chairman of Baugur, said about the decision, “In light of these charges we believe that the only right thing to do is to withdraw even though the individuals in question deny the charges. It is important to keep in mind that Baugur is a victim of these alleged offences, the investigation has not centered around the company and no charges have been made against it.”
Furthermore, Baugur and the consortium have agreed to the following: 1) Baugur will sell all of its stock in Somerfield plc for 190 pence per share to a company under management of the Tchenguiz Family Trust, and 2) If the consortium concludes the acquisition of Somerfield it will reimburse Baugur costs incurred by Baugur in the preparation of the possible acquisition of Somerfield.
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According to Iceland State Radio, RÚV, Baugur will make a profit of 3.5 billion Icelandic króna by selling its Somerfield stock.
The charges have not been made public. The lawyer of Baugur CEO Jón Ásgeir Jóhannesson said, today, that the charges would be published “soon”. It is expected that Baugur representatives will publish them in the next few days.
The Somerfield consortium now includes Apax Partners, Barclays Capital and Robert Tchenguiz.
