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Last Updated: Thursday, 5 June, 2003, 07:00 GMT 08:00 UK
Somerfield shuns takeover bid
Somerfield supermarket
Somerfield 'Solid strategy'
Supermarket chain Somerfield has rejected a 594m ($970m) takeover bid as not high enough.

The offer, from retail entrepreneurs John Lovering and Bob Mackenzie, is the second bid to be rejected by the Bristol-based company.

In April, Somerfield turned down a 510m offer from the pair.

Somerfield said the latest offer still undervalued the company and meant some of its stores would be taken over by rival supermarket Sainsbury's.

The UK supermarket business is going through a period of consolidation, with Sainsbury's, Tesco and Asda amongst those fighting to buy Safeways.

But Somerfield has remained staunchly independent so far.

A statement from the company said that the board's decision to reject the revised offer had been unanimous.

Chairman John von Spreckelsen said: "This latest approach substantially undervalues our business. We have strong brands in Somerfield and Kwik Save, a solid strategy for delivering shareholder value and excellent prospects.

"The strategy is underpinned by a very strong balance sheet and a valuable property portfolio."

The company, which operates 588 Somerfield stores and 686 Kwik Save outlets, said it would seek instead to boost shareholder value by steaming ahead with its new format stores.

Somerfield shares rose 6.5%t to 105.5p on the news.

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15 Apr 03  |  Business

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