"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Tuesday, July 15, 2008

Co-op land in the divvy as Ronnie Cohen's Apax give Somerfield away - Lovering the "hot deal maker" with egg all over his fat happy face

In November 2005 Gordon Brown's friend, Ronnie Cohen and his Apax Partners took over struggling Somerfield plc in a £1.1 Bn. all-cash take-over offer with Barclays Capital (they already owned 12.4%) , and Iranian-born Robert Tchenguiz and his younger brother Vincent who fled from the Shah in 1979. They have just 4% share of the UK food market

The star studded management team (see below) were happy to quickly unload (for an undisclosed sum) the old loss making (£40Mn a year) Kwik Save just 3 months later, in February 2006 with 171 stores and 4,000 employees to BTTF the optimistically entitled Back to the Future consortium led by Peacock Group's Chief Executive Richard Kirk which includes Paul Niklas, the former managing director of Formica. (Sunday, March 04, 2007 Ronnie Cohen, Gordon Brown, Israel, There is no Israeli Lobby )

Somerfield is Headed by John Lovering (D. Tel " regarded as one of private equity's canniest deal-makers ??)as Chairman who is also and Chairman of Debenhams and led several consumer-focused private-equity transactions including Fitness First, Laurel High Street, Homebase, Odeon Cinemas, Birthdays Group and Peacock. He was Chief Operating Officer at Tarmac plc and Finance Director at Sears plc. and by Februaru 2006 he had appointed a strong team of retail mega stars.

CEO Paul Mason (42) was the European President of Levi Strauss and previously CEO of Matalan Plc (Jan 2002 - March 2003) and President and Managing Director of Asda Wal Mart (2000 - 2001) and had been with B & Q.

Colin Smith ,Trading and Marketing Director (50) who joined from Tesco where he had been for along time.

John Cleland Retail Director (40) was the Commercial Managing Director of B&Q since January 2005. Prior to this he was Senior Vice President Operations at Wal-Mart, Japan and Retail Managing Director at Wal-Mart UK .

Some stores were closed, others (12) were sold to Sainsbury's and lot of money spent on re-vamping and store design.

140 Texaco fuel stations were bought from Texaco Chevron in 2007 and Somerfield have been busy "integrating thei brand" which means tripling store size, format and brand tofit the overall Somerfield brand. This lifted floor space from 83,000 sq ft to about 250,000 sq ft. The cost was not made public but intelligent guesses were in the region of £100Mn.

The stores have been up for sale for some time and interets expressed and Somefiled have been mentioning figures of up to £2.5Bn.. anyway the Co-op, (worlds largest with 1.5 million economically active members) their principal competitor and fifth biggest food retailer, is said to have finally offered £1.6 Bn. take it or leave it, which Ronnie choking on his Dubonnet has accepted - well Barcap are desperate for some cash in their till - there is every possibility they have extractedsome dosh on a sale and leaseback on the property of course.

On the face of it this looks as if Ronnie Cohen and his pals and the ever smiling Mr Robert Tchenguiz will just have washed their face during their brief ownership.

This is good news for the Co-op, it will extend their national spread, move them into more prosperous areas and bring fuel into the mix, yielding revenues and boosting footfall. Last year they turned over £9.4bn with 87,000 employees serving around 10 million customers a week through food, healthcare, travel, funeral care and financial services and paid a £19 Mn divvy to customers in 2006 which on 26th June they announced would be doubled this year to £38 Mn..

£550,000 of this divvy, to rounding down is given to community groups. They are of course very active in sourcing fair trade foods.

Meanwhile all eys are on ITV to see if Ronnie decides that now they are at a give away price of 42 p his pal Ronnie Lauder, and co- owner of Central European Media Enterprises Ltd. (CME) (NASDAQ/ Prague Stock Exchange: CETV) who have TV interests in East Europe , Ukraine (Studio 1+1, Studio 1+1 International, Kino etc ) decide to gobble them up. See Thursday, August 30, 2007 Igor Kolomoisky and Ronie Lauder kiss and make up at CETV and for the whole history see here.

Trebles all round in Balloon Street tonight for the lads.

For a brief history of the origins of the Co-op Movement go here

UPDATE : Times Online - Co-op wraps up £1.6bn takeover of Somerfield

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