Shares in B&M climb 4% as Asda circles
Shares in Liverpool-based discount retailer B&M have risen 4% following news that Asda is poised for a £4.4bn takeover bid.
Walmart-owned Asda – the UK’s third largest supermarket chain – is said to be attempting to see of competition from rivals successful cut-price rivals Lidl and Aldi.
Asda has suffered 11th consecutive quarter of declining sales in May, while B&M’s 500 stores are seen as an outlet for products like its George clothing range.
Asda is believed to be in the early stages of assessing a potential bid for B&M, whose chairman is former Tesco chief executive Sir Terry Leahy.
The Yorkshire-headquartered retailer has continued to focus on larger stores as rivals have moved into the convenience market, a sector which has seen more rapid growth in recent years.
And discount shops such as Poundland have begun competing with Asda by selling clothing.
B&M’s sales grew 18% in the first quarter of 2017 and the company is targeting further rapid expansion. Simon and Bobby Arora, the brothers who run the business, have said they plan to grow the estate from 543 shops to 950.
The brothers are now estimated to be worth almost £2bn, having recently cashed in £230m-worth of B&M shares.
