Asda bids £500m for Littlewoods store chain

ASDA, the UK supermarket group, has made a £500m unsolicited bid for the Littlewoods department store chain, owned by the Barclay brothers, the billionaire media tycoons.

ASDA, the UK supermarket group, has made a £500m unsolicited bid for the Littlewoods department store chain, owned by the Barclay brothers, the billionaire media tycoons.

A deal would see Asda pick up the 119 Littlewoods stores, as well as 67 other outlets that run under the Index brand. The Littlewoods group owns the freehold to 32 of the 186 stores.

New Look and Primark, the high-street clothes retailers, are also thought to be interested in the stores.

A Littlewoods spokeswoman said that the group had not been looking for a buyer, and did not need to sell. "The group has received expressions of interest in its stores business, which it is reviewing," she said. "However, no decision had been made to sell the business. The group is very pleased with the progress of the turnaround plan of the new management team."

The Barclay brothers bought the Littlewoods chain from the Moores family in 2002 for £750m, and the catalogue business from GUS for £590m eight months later.

In November 2003, the company poached Mark Newton-Jones from Next, the fashion retailer, to turn around the stores business.

The company's last set of results, covering the six months to October 2004, showed that like-for-like sales were up 5 per cent and margins had increased 11 per cent.

Given the early success of the turnaround plan, Littlewoods is thought to be unlikely to agree to a sale unless a much higher offer is made.

An Asda spokeswoman would not comment yesterday.