DFS founder ‘in talks’ over Iceland bid

LORD Kirkham, the founder of sofa retailer DFS, is reported to be in talks with the chief executive of Iceland about providing backing for a £1.1bn bid for the frozen food grocer.

Iceland founder and chief executive Malcolm Walker has reportedly held talks with the founders of retail chains Matalan and DFS about providing backing for his bid.

The Sunday Telegraph said Mr Walker, who with management colleagues controls a 23% stake in the Deeside company, has held conversations with John Hargreaves, the founder of Matalan, and Lord Kirkham, of Doncaster-headquartered DFS, about supporting his potential bid for the majority 77% stake which is up for sale.

The pair, along with a small number of other family backers, are believed to have offered equity backing if Mr Walker does bid.

The newspaper said Mr Walker – who founded the business in 1970 –  has already amassed debt financing from a syndicate of banks plus financial support from Alberta Investment Management Corporation.

Under the complex shareholder agreement with Landsbanki and Glitnir – which own the remaining 77% – Mr Walker has to match the highest bid to win the auction.

The two Icelandic banks are selling their stakes in Iceland Foods, which they inherited as the result of the collapse of retail conglomerate Baugur.

But it remains uncertain if Mr Walker will bid at all after Landsbanki demanded bidders offer at least £1.3bn.

It is believed Lord Kirkham earned £300m after selling DFS for around £500m to private equity firm Advent International last year.