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LONDON (Reuters) - shaky financial markets and the complexity of the transaction could hinder the auction for a controlling stake in British grocer Iceland food and proceeds to the creditors of the failed Icelandic banks, including the United Kingdom and the Netherlands to limit.
Get full control over the frozen specialists name within the entire Iceland food buy seem to only a few, founder and CEO Malcolm Walker, who already has 23 percent with other managers, is in the strongest position.
Supermarket group WM Morrison (MRW.)(L) is the most likely trade buyers, analysts said people familiar with the situation, and of these two names were as possible bidders limit their interest to lots of shops.
"It looks like we for a pretty limited field position could", said a person close to the process.
Private equity was also expected to have a look because of the counter-cyclical nature of Iceland someone else said food, whose low priced have hit a nerve with cash-strapped buyer, although hard financial conditions may deter some of them,.
Hope for a large payment could dash, to the creditors of the collapsed Icelandic banks Landsbanki and Glitnir, the control of their 67 percent and 10 percent shares in Iceland food or obtained after the fall of the investment group Baugur.
Analyst Chris Hogbin with brokerage Bernstein, Walker as an application involve looks, expects a lot value the whole company at £ 1.3 billion to 1.5 billion, compared to early hopes of up to 2 billion.
Walker, 1970 food founded Iceland and had an offer rejected the assessment of the business 1 billion pounds last year, has said he is confident that the necessary resources and has no plans to sell his shares or a the 800 or so save.
If he needs help, an option for him could correspond to team up to Morrison's, that can buy a piece of business from him.
Team could need with a private equity firm the 65 year-old, who earlier this year of Mount Everest, money for charity raising increased, the people close to the shops that they buy to start after a takeover.
Bank of America Merrill Lynch and UBS, which carry out the auction should be, to send information to potential bidders this month.
LEBENSMITTELGESCHÃ ¤ FT WANT TO CURRANT HERAUSPICKEN
If Landsbanki announced their share of Iceland food for sale would arrive this year, was generally accepted that the most British top grocers to ft would get involved in the auction.
Have the most ambitious store hours, programs, and here was a rare occasion, a large number of shops in a bag.
However, many Iceland foods stores are an awkward size. An average 4,900 square metre, according to grocery specialists IGD, many are too large to become a convenience store that would come for longer opening hours, but small for a supermarket in question. Many are on secondary sites, and most have no parking.
Britain's top three grocers and ft have to restrain other reasons for that. Industry leader Tesco (TSCO.)(L) would problems with competition regulators at Wal-Mart (WMT).(N) ASDA is busy, the purchase of net UK and Sainsbury's (SBRY.)(L) the strength of the balance sheet does not have analysts said.
Smaller competitors, such as the co-operative Group and Waitrose, said that they are interested in only packages of shops.
There is a chance, the multiple grocers to ft together could club to try to carve the business, but that would be complicated. Apart from the fact that probably Walker to sell to convince said she all probably would want the same background-in prime locations and with a parking lot, analysts.
People with the matter familiar said that Tesco and Sainsbury, at least were likely not to participate in a consortium, are expressed with an interest in business, when a new owner decided or by the regulatory authorities had to sell some sites.
PRIVATE EQUITY AND MORRISONS
Private-equity firms, such as Apax, BC partners, TPG, Blackstone (BX).(N), Permira and advent, may be interested in, in collaboration with Walker in the light of his strong at Iceland foods, analysts are not said, although some described it as a communication party individual, always easy to work with.
In an agreement shareholder Walker wins the auction unless he the highest Gebot--correspond to private-equity can lower than expected may be given would deal with shrinking liquidity in the bond markets.
"We have no fully functioning syndications market." It feels like 2008, when bidders had to their financing in place before an offer, ", said a banker who advises private equity firms.
However said one of the people close to the matter, it was too early to the private-equity rule of running, and there have been any number of permutations, such as several houses including working together or collaboration with grocers to ft.
"The process still not started." It is too early to call success or failure, said the person."
Financing is probably less of a problem for Morrison's, has a strong balance sheet and, unlike as private equity firms, food with the existing savings from the combination of Iceland able, would be.
Iceland buy food would boost Morrison's ' position in the fast-growing smaller stores and help its target to the market share in the South of England. But it can be risky, since Morrison's has just started testing convenience stores and had great difficulty, the integration of the purchase by Safeway in 2004.
"I'm not sure the stock market," said Philip Dorgan analyst at the brokerage Panmure Gordon. "In theory, would they add up, but in practice we know with Safeway/Morrison's it works not always like that."
(Editing by Dan Lalor and David Holmes)

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