B&M shares jump 4% on reports Asda is considering £4.4bn takeover bid

Ben ChapmanMonday 24 July 2017 10:59 BST
Shares in discount retailer B&M jumped 4 per cent after reports that Asda is reportedly eyeing up a £4.4bn takeover bid. 
Asda is understood to be attempting diversification to combat the threat of cut-price rivals, Lidl and Aldi.
Walmart-owned Asda, Britain’s third-biggest supermarket chain, has seen sales fall over the last three years amid fierce competition in the groceries sector.
FTSE 250-listed B&M could give Asda 500 extra stores through which to sell products such as its George clothing range.
The takeover target counts former Tesco chief executive Sir Terry Leahy as its chairman. Asda is in the early stages of assessing a potential bid for B&M, having commissioned external research into the company, the Sunday Times reports.
Asda did not immediately respond to a request for comment.
A move for B&M would follow similar deals by larger rivals Tesco and Sainsbury’s. Tesco is in the middle of a £3.7bn takeover attempt of wholesaler Booker, with the deal currently being assessed by the Competition and Markets Authority amid fears that the combined firm could have too much power in the sector.
Sainsbury’s completed its acquisition of Argos owner Home Retail for £1.4bn last September and has begun installing Argos concessions inside its supermarkets.
B&M sells a broad range of products ranging from furniture to home appliances to food. 
Asda, which has positioned itself at the cheaper end of the big four supermarkets, has been hardest hit by the rise of the German discount chains, having reported its 11th straight quarter of declining sales in May.