Bank linked to Iceland Foods sale

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Frozen food supermarket Iceland and toy emporium Hamleys are to be sold by failed Icelandic bank Landsbanki, according to reports

Frozen food supermarket Iceland and toy emporium Hamleys are to be sold by failed Icelandic bank Landsbanki, according to reports.

The bank will put its 67% stake in Iceland Foods’ 800 store empire on the market and hopes to complete a sale, valuing the company at about £1.5 billion, in the next 10 months, the Daily Telegraph said.

Landsbanki is also open to offers for its 65% stake in toy emporium Hamleys although it has not yet started a formal sales process, Retail Week added.

Iceland Foods’ founder and chief executive Malcolm Walker, who owns about 24% of the business with his management team, made a £1 billion bid to take full control of the company last autumn and is likely to be among the bidders.

Landsbanki also owns a 35% stake in department store group House of Fraser and 66% of Aurum, which owns Mappin & Webb, Watches of Switzerland and Goldsmiths, but is not understood to be selling these stores in the immediate future.

Landsbanki came to own stakes in the retailers after Icelandic investment firm Baugur, which bought out great swathes of the UK high street, went bankrupt and its assets were seized by the bank.

Landsbanki is gradually winding up its assets and chose to sell Iceland first because of its strong performance in recent years after Mr Walker returned to the company in 2005 and led a renaissance.

Iceland has boomed in the recession as sales of frozen food grew because it is considered to be good value for money by consumers, and Landsbanki’s head of communications Pall Benediktsson told Retail Week that he expected both businesses to attract substantial interest.

He said: “The market is getting better so it’s time to start proceedings. These are highly valued and well known companies. We get lots of requests and people are approaching us.”

He said it was likely that the bank will sell all its assets in the next three years but stressed there will be no sale of its share in House of Fraser until at least 2012 and no sale of its share in Aurum “for some time”.

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