Grocery giant Asda plays down B&M takeover speculation
Senior Asda sources yesterday played down media speculation that the supermarket giant owned by Walmart of the US is weighing a £4.4 billion takeover offer for UK discount retailer B&M.
However, the pouring of cold water on reports of what would be the latest in a flurry of consolidation involving the supermarket sector failed to stop B&M’S shares jumping markedly. The stock closed up almost 5 per cent at 357.5p.
B&M is owned by the billionaire Arora brothers, and has former Tesco boss Sir Terry Leahy as chairman. The Aroras have built the group into a 500-store player since taking control in 2004.
Analysts said that acquir- ing the chain would give Asda access to a network of high street shops through which to distribute its products, including the George clothing range.
Clive Black, analyst at Shore Capital, said: “B&M would bring great capability in general merchandise value retailing for Asda, with its strong range, authority, pricing and space growth, whilst providing George, Asda’s excellent apparel brand, the scope for space growth in largely complementary locations. B&M is also increasingly effective in grocery. Cost synergies would be potentially evident in central overheads, sourcing and logistics.”
A deal would also release pressure on Asda’s core supermarket business, which has seen years of sales declines amid rising competition.