Two private equity firms bid for Iceland Foods - sources

Two buyout houses have placed bids for British frozen food retailer Iceland Foods, people familiar with the matter said, in an auction that the vendors hope will value the business at around 1.5 billion pounds.

The bids from BC Partners and Bain Capital are "aggressive" the people said, although they did not indicate whether supermarket chain Wm Morrison was still in the process.

Iceland Chief Executive Malcolm Walker has 42 days to match the highest bid under the shareholder agreement. Walker and other managers control 23 percent of the business, which he founded over 30 years ago.

Failed Icelandic banks Landsbanki and Glitnir are selling the remaining 77 percent.

Walker had a bid that valued Iceland Foods at about 1 billion pounds turned down in 2010.

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