The chief executive of Iceland Foods, Malcolm Walker, said today the management of the grocer is in exclusive talks with two failed banks to buy out a 77 per cent stake in the unlisted company which he valued at £1.55 billion (€1.87 billion).

"We've moved into exclusive talks," Mr Walker, who along with other managers already owns 23 per cent of Iceland Foods, said. He declined to give details on the financing of his bid, but said he was not working with rival private equity bidders Bain Capital and BC Partners. He said a deal was likely to be reached in two to three weeks.

Iceland Foods in a statement today confirmed the grocer's management had signed an agreement with the sellers, failed Icelandic banks Landsbanki and Glitnir, which allows the opportunity to buy the company ahead of any other possible bids.

"I am delighted that the Icelandic banks have recognised the importance of management to the continuing success of the business, and have been supportive in giving us the exclusive right to pursue negotiations with them," Mr Walker said.

"I have every hope that we will be able to bring these to a successful conclusion within the coming weeks."

Bain Capital and BC Partners placed bids for the frozen food retailer, earlier this month, leaving Mr Walker 42 days to match the highest bid under a shareholder agreement.

The Icelandic owners rejected a £1-billion bid by Mr Walker in 2010 for the remainder of the business, which he founded over 30 years ago.

Reuters