SUPERMARKET group Somerfield has received a £1bn approach from Baugur, the Icelandic group that has already pulled off a number of takeovers in the UK.

The company, which owns the Kwik-Save chain and has more than 50 stores in the North-East and North Yorkshire, said it was investigating the proposed offer, worth 190p a share.

It is too early to say how the move will affect stores or jobs.

Baugur, which owns womenswear stores including Karen Millen and Coast, is days away from completing the takeover of the Iceland chain from Big Food Group.

Analysts had been expecting a Somerfield bid from Baugur as it would enable the Icelandic company to bolster the operation of the Big Food Group business, which it has agreed to buy for about £326m.

Baugur, which has also acquired Hamleys and Goldsmiths in recent months, will have an estimated turnover of £6.8bn following the Big Food deal - equivalent to Iceland's gross domestic product.

It is also expected to have 50,000 employees and 2,400 shops.

The company's strategy involves working alongside existing management teams, a tactic that Somerfield said had been applied to the latest approach.

Anthony Platts, assistant director at Teesside investment managers Wise Speke, said: "Somerfield has been much ignored by the market, despite a 5.5 per cent share of the UK food retailing market, due to its disappointing like-for-like sales and hefty pension deficit.

"However, the Icelandic raiders Baugur may just have outwitted the City with the move.

"Somerfield has recently been picking up the spare Safeway stores that nobody else wanted on the cheap and it looks as if Baugur has been watching events, ready to pounce."

The supermarket chain also said the offer was subject to a number of pre-conditions, including the undertaking of due diligence (checking the company's accounts), financing and agreement on the funding of pension schemes.

Somerfield said: ''The board is investigating this approach. There can be no certainty that an offer will be forthcoming. The board will make a further announcement in due course.''

Somerfield was last in the bid spotlight in 2003, when it rejected a £594m approach from retail entrepreneurs John Lovering and Bob Mackenzie.

The chain, which operates from 700 Somerfield stores and more than 500 Kwik Save sites, recently revealed a decline in like-for-like sales as it joined other retailers in warning of challenging trading conditions.

The group, which is the UK's sixth largest supermarket chain, has been involved in a battle to win back market share after encountering problems integrating Kwik Save.

It has more than 40 Kwik Save stores around the region, including in the Sunderland, Newcastle and Teesside areas, as well as in York, Spennymoor, Bishop Auckland and Durham.

It also has Somerfield stores in Yarm, Guisborough, Redcar, Saltburn and Stockton in Teesside, York, Northallerton and Richmond in North Yorkshire, Langley Moor near Durham, Wallsend, Hetton-le- Hole and Newcastle.