Rivals line up for Somerfield

SUPERMARKET giants Coop and Asda are the front-runners to buy grocery chain Somerfield after both tabled bids for the whole business.

But with competing offers understood to be well below the £2.5 billion sought by shareholders, it is increasingly likely the Bristol-based company will be broken up.

Somerfield’s shareholder consortium - private-equity groups Apax, Barclays Capital and property magnate Robert Tchenguiz - is believed to be eager to sell the previously loss-making company as a whole.

Industry sources are sceptical about whether Asda or Coop is interested in acquiring all Somerfield’s stores and suggest that the low bids could be a tactic to force a break-up of the group.

Fortunes at Somerfield have begun to look up after the business posted pretax profits of £23.4m for 2007 against a loss of £118.1m during the previous 12 months.

Sandler in outsourcing offer

RON SANDLER, the chairman of Northern Rock, is working on plans to save jobs on Tyneside by offering the nationalised bank’s services to other lenders. Northern Rock still has one of the most efficient mortgage-processing systems in the country.

Sandler has sounded out building societies on their appetite to outsource business. It is understood that the move could save some of the 6,000 jobs – at least temporarily.

New office lands on Mayfair

THE commercial-property market may be in the doldrums, but the Mayfair office market is still booming. A glitzy office project at 65 Grosvenor Street, developed by property fund Welput, started marketing last week with an asking rent of £135 per sq ft – the highest in London’s history. The 25,000 sq ft scheme is expected to smash rental records for a commercial building in London if it attracts a tenant this year.

Bank expected to hold rate

THE Bank of England is set to keep interest rates on hold at 5.25% this week, despite further evidence of economic weakness and market uncertainty, and calls from business for more cuts. The “shadow” monetary policy committee, which meets under the auspices of the Institute of Economic Affairs and votes on rates ahead of each of the Bank’s monthly decisions, comes out with a 7-2 verdict for no change. Apart from the two members who voted for a cut, two others had a bias towards cutting rates, but the others did not. A similar clear-cut verdict is expected when the nine members of the Bank’s committee meet this week.

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