Page last updated at 11:47 GMT, Monday, 4 July 2005 12:47 UK

Baugur: From Iceland to Iceland

Iceland store
Baugur bought the Big Food Group - Iceland stores' owner - in 2004
Icelandic investment group Baugur has hit the headlines again after it was revealed that five people at the company face fraud charges.

The charges come as Baugur continues to be part of a consortium considering a 1.12bn ($2bn) bid for UK supermarket group Somerfield.

Baugur said on Monday that the five accused - who include its chief executive Jon Asgeir Johannesson - "strenuously" deny the charges.

The company also said that the fraud allegations would have no impact on its efforts to buy Somerfield, in which it already has a 5% stake.

Baugur insisted it was "business as usual", and said reports it was to drop out of the takeover consortium were "nonsense".

Rapid expansion

Ignoring the fraud charges, Baugur has come a long way since Mr Johannesson and his father Johannes opened their first shop in Reykjavik in 1989.

Somerfield supermarket
Baugur is now eyeing Somerfield

Called Bonus, within three years there was a network of the stores across Iceland, promising to offer the lowest possible prices.

The Baugur name was born in 1993 when Bonus and fellow Icelandic retailer Hagkaup set up Baugur as a common sourcing company.

In 1998 Bonus and Hagkaup formerly merged under the Baugur name to create Iceland's largest retailer.

Baugur has grown at a very fast pace ever since, and is today a Europe-wide investment group with a wide range of interests in retail and property.

British interests

It first entered the UK retail sector in 2003 when it purchased the iconic London toy store Hamleys, and a majority stake in British fashion chain Oasis.

Baugur chief executive Jon Asgeir Johannesson
Jon Asgeir Johannesson and four others face fraud charges

The following year it bought the then struggling Wales-based UK food retailer Big Food Group for 326m in an all cash deal.

Big Food's outlets included frozen food retailer Iceland, the Booker cash-and carry chain, and Woodward Foodservice.

In 2004 Baugur also purchased a majority stake in British jewellers Goldsmiths.

However, in September 2004 - in a reverse of its usual policy - Baugur sold its 10% stake in department store group House of Fraser.

The same busy year also saw Oasis being sold to Karen Millen. Both were brought together under a new parent company called Mosaic Fashions, in which Baugur has a 42% share.

In the property sphere, Baugur has an investment in UK real estate development company LXB Properties.

Baugur's continuing efforts to take over Bristol-based Somerfield is in partnership with Iranian property tycoon Robert Tchenguiz.

The consortium is also said to include London & Regional Properties and Japanese bank Nomura.

If the deal were to be successful, Baugur would become the fifth-biggest food retailer in the UK, with a share of about 7.6%, behind Morrison, which bought Safeway in 2004.

Baugur is said to be tightly run by Jon Asgeir Johannesson, whose family is estimated to own 70% of the business.

Baugur still eyes Somerfield bid
04 Jul 05 |  Business
Suitor quits Somerfield bid race
28 Jun 05 |  Business
Somerfield sales 'under pressure'
11 May 05 |  Business
Baugur buys UK's Big Food Group
19 Dec 04 |  Business
Icelandic firm buys fashion chain
11 Nov 04 |  Business
Hamleys suitor raises offer
03 Jul 03 |  Business

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