Published June 23, 2011

A bidding war is looming regarding the sale of Iceland, the supermarket chain, a UK frozen food specialist that is 67% owned by Landsbanki and 10% by Glitnir. The chain now owns close to 800 stores and has recently reported record sales: Profits have risen by 20% year on year in March, and sales have increased by £156 million. Iceland’s total annual sales now exceeds £3bn. UK Retail giants ASDA, Morrisons, and even US-based Walmart, appear to be interested in acquiring the chain. Malcolm Walker, founder and present CEO, owns 23% of the company, and recently told Bloomberg that he would outmatch any bid.
Landsbanki’s stake in the supermarket chain is currently being valued up to £2 bn (€2.26 bn), which, if sold would most likely be put toward settling the €3.9 Icesave debt towards Britain and the Netherlands. Last year, Malcolm offered Landsbanki £1bn for the chain. Good news for Icelandic taxpayers: It is expected that Landsbanki may stand a good chance getting more than double that.
Malcolm, who recently informed the Daily Mail that he has now secured necessary funding to match any bid, is now in discussions with UBS and Merrill Lynch who have been hired by Landsbanki to negotiate the deal. If all things go according to plan, this sale will put a huge dent in the Icesave debts and may well arrive before Iceland has to face the EEA court. Last week, European trading watchdogs gave Iceland three months to pay the British and Dutch governments’ Icesave compensation scheme—or else.
Big in the news these last days is the high-tech revision of Iceland’s constitution. The international media appear to be quite baffled about the fact that Iceland’s constitutional committee—who are currently overhauling the country’s constitution— has invited all citizens to participate in putting forward suggestions online. Spokesperson Berghildur Bernharðsdóttir told the Associated Press that most of the discussions actually take place on Facebook. Prime Minister Jóhanna Sigurðardóttir said that in her mind a clear review of the constitution would only [ever] be carried out with the “direct participation of the Icelandic people”.
The Washington Post recently ran with the tongue-in-cheek headline ‘Iceland Crowdsources its Constitution’, intimating that ratified policies will all come about through online social media. “The constitution makers are present on Twitter, they’re posting interviews on YouTube, and their pictures are even posted on Flickr”. In the Guardian, Þorvaldur Gylfason, a member of the constitutional council, was quoted as saying, “This is the first time a constitution is being drafted basically on the internet”.
And Katrín Oddsdóttir, another council member, told CNN, “[After the economic crisis], we were forced to do something about our democracy. The social contract is the basis of our society…Everything is open for discussion. What’s happening is that we are creating ownership…Thousands of people are writing the constitution together, online”.
Foreign Policy Magazine could not resist these snide comments: “This model may have worked in the Viking days—I’m guessing administrative tasks were pretty minimal back then, but this new scheme seems to combine all the world features of local government community forums and online comment boards. It will be interesting to see how much of the public input will actually be incorporated into the final draft”.
Honestly, though, what’s to be snide about? The fact that this tiny nation are all nosing up to their laptops and voicing their opinions and actually being listened to by the powers-that-be can surely only be a good thing. And, unlike many other nations, the fact that everything is open for all to see does smell of a real democracy in the making. Now if only that little problem of our finances can be sorted out we can start getting on with our lives again.
Fingers crossed for Malcolm Walker.