Morrisons’ recent bid for rival UK supermarket Safeway sparked a furious round of counter-proposals. Morrisons has secured £1bn (US$1.6bn) of new bank facilities, £250m of which is earmarked for refinancing Safeway’s debt. With offers and counter-offers, phoney or otherwise, now coming in thick and fast, deep pockets and patience may well end up winning the day.

Following Morrisons’ initial offer for UK supermarket chain Safeway the country’s leading food retailers have rushed to jump on the bandwagon. Sainsbury’s, Asda Wal-Mart and Tesco have all joined Morrisons in expressing interest, with all the major retailers except Tesco having made submissions to the Office of Fair Trading (OFT) about whether any potential deals would need to be referred to the Competition Commission.

Herein lies the first stumbling block. The OFT is due to decide whether to refer any potential deals to the Commission at the end of February. If the Commission gets involved, the process could take up to 6 months, scuppering any hope of a quick deal.

Widespread speculation exists that some firms may be submitting bids as a spoiler tactic. If bids by large players draw in the Commission then one of the smaller players, such as Philip Green, may emerge the eventual winner. That would leave the larger chains to mop up any suitable stores that may come available following the final deal.

Alternatively, a company with enough financial clout, most likely Asda Wal-Mart, could make a pre-emptive cash offer for Safeway. But this too carries risks; it would probably be referred to the competition authorities, and it if it were blocked a forced sale of shares might be imposed.

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With the true intentions of the myriad bidders still a matter of speculation, and the decisions of the OFT and potentially the Competition Commission up in the air, a speedy resolution to the game looks unlikely.

Ultimately, deep pockets and patience may mark out the winner of a protracted bidding war. Asda Wal-Mart certainly has the deep pockets, and having been unable to significantly close the gap in market share between itself and Tesco over the past few years, it may well have the stomach for a long drawn out battle. The games will continue, but the end seems far from near.

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