Supermarket giant Asda is said to be eyeing up Merseyside based discount chain B&M Retail - raising questions about the future of more than 1,000 local jobs.
Shares in the 500 store strong B&M rose 5% in stockmarket trading this morning following City reports that Yorkshire-based Asda is considering a £4.4bn bid.
But it could cast doubt over the future of the 1,200 people employed at its Speke head office and distribution operations.
As well as its head office, the firm operates from two huge warehouses based at the Estuary Commerce Park, known as the Qube and the Vault.
Nationally, B&M employs 22,500 people. As well as its 500 UK stores, it has another 95 outlets in Germany.
The fast-growing chain could prove highly attractive to the struggling Asda, which has suffered 11 consecutive quarters of declining sales.
B&M currently has a stockmarket value in excess of £3.5bn and is owned by the billionaire Arora brothers, who took control of the firm in 2004.
Acquiring the retailer would give Walmart-owned Asda access to a network of high street shops through which to distribute its products, including the George clothing range.
Clive Black, analyst at stockbroking firm Shore Capital, said: “B&M would bring great capability in general merchandise value retailing for Asda, with its strong range, authority, pricing and space growth, whilst providing George, Asda’s excellent apparel brand, the scope for space growth in largely complementary locations. B&M is also increasingly effective in grocery, we should add.”
Crucially for B&M’s Merseyside staff, the analyst warns that the bulk of cost-savings from any merger could come from head office and warehousing operations. He said: “Cost synergies would be potentially evident in central overheads, sourcing and logistics.”
Asda currently employs 600 people at its recently opened, highly automated, £100m Warrington distributions centre.
Any bid by Asda for B&M would be the latest in a flurry of supermarket takeover activity. Tesco is attempting a £3.7bn merger with Booker and a mooted attempt by Sainsbury’s to acquire Nisa is also thought to be on the cards, barely a year after it took over Argos.
Neither B&M nor Asda were prepared to comment on the City reports.
