B&M Bargains soars as Walmart’s Asda ‘mulls bid’

Shares in cheap and cheerful retailer B&M jumped 5% on Monday after a weekend report it is a takeover target for Asda, the supermarket owned by American giant Walmart.

B&M, built by the Arora brothers into a serious challenger to the big grocers, saw shares up 15p to 357p leaving the company valued at £3.5 billion.

That’s still some way shy of the £4.4 billion Asda is supposedly willing to offer, suggesting considerable scepticism about the deal.

The Sunday Times said Asda is in the early stages of assessing a bid for B&M, which is chaired by former Tesco boss Sir Terry Leahy.

Last month the Aroras cashed in £230 million worth of shares, cutting their stake to 15%. A bid for B&M would be just the latest in the sector. Sainsbury’s bought Argos last year and Tesco is in the midst of a deal for Booker.

Though sources played down Asda’s interest, its parent could clearly afford to make an offer. Walmart is the biggest company in the world by revenue with annual sales of around $500 billion (£384 billion). There are 500 B&M stores in the UK, selling homewares and food at knockdown prices.