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B&M European Value Retail shares gain on Asda takeover bid speculation

Published: 21:28 24 Jul 2017 AEST

bbq
B&M sells products ranging from barbecues and bedding

B&M European Value Retail (LON:BME) shares jumped amid speculation that Asda was considering a £4.4bn takeover bid.

Asda, the UK supermarket arm of Wal-Mart Stores Inc (NYSE:WMT), is said to be in early stages of mulling over an offer for the British discount retailer, The Sunday Times reported.

Shares in B&M rose 3.2% to 351.80p at midday trading.

READ: Sainsbury's former boss warns Brexit will mean rising food prices, less choice and poorer quality

It is understood that Asda believes buying B&M would reduce its reliance on food sales amid a supermarket price war in the UK.

Asda and B&M both declined to comment.

B&M, chaired by the former executive of Tesco PLC (LON:TSC), has more than 540 stores in the UK that sell products ranging from bedding to barbecues.  

If Asda put in a bid for B&M, it would be following in the footsteps of UK supermarket rivals J Sainsbury PLC (LON:SBRY) and Tesco.

Sainsbury's last year bought Argos-owner Home Retail for £1.1bn while in January Tesco agreed a £3.7bn takeover of wholesaler Booker.  

Supermarkets are branching out of their core food operations as smaller discounters, Lidl and Aldi, take over market share. 

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