UK supermarket giant Morrison weighing £1.5-bn takeover of Iceland Foods

UK supermarket giant WM Morrison is weighing a £1.5-billion ($2.4 billion) takeover of frozen food chain Iceland Foods Ltd., according to the UK media.

WM Morrison, Britain's fourth largest grocery chain is plotting the takeover in order to face up to competition from its rivals Tesco, Asda and Sainsbury, but is likely to face a counter offer from Iceland Food's founder and chief executive Malcolm Walker.

Wales-based Iceland Foods is 67-per cent held by the collapsed Icelandic bank, Landsbanki, while Walker holds 24 per cent. Last week, Landsbanki said that it wanted to sell its stake.

Walker founded Iceland Food's in 1970 but was ousted as chairman in 2001. He was brought back by the now bankrupt Icelandic retail group Baugur, who took over the company in 2005. 

Walker had made a £1 billion offer last year for the retail chain, which was rejected, but he has the right to match a competing bid or force the potential suitors to buy his stake as well.

In 2005, Baugur and a consortium of Icelandic investmors had acquired Iceland Food's then parent company The Big Food Group for £326 million, only to end up collapsing in February 2009 during the global financial crisis. Its stake was passed on to Landsbanki and Glitnir, the two banks that went bankrupt in October 2009.