UK supermarket and takeover target Safeway has told its shareholders that it no longer recommends that they accept an offer from smaller rival Morrisons.
Morrisons’ bid, which remains the only definate bid for Safeway, has sparked a massive amount of interest in the UK’s fourth-largest supermarket chain, with Sainsbury, Asda/Wal-Mart, Philip Green, Kohlberg Kravis Roberts and Tesco all now considering bids.
Safeway chairman David Webster was quoted as saying by BBC Online: “The board of Safeway continues to believe that a combination with Morrisons represents an opportunity to create a new dynamic force in UK food retailing and remains fully supportive of Morrisons pursuing its offer.
“However, in the light of the announcements by potential competing offers, we are advising shareholders to await developments.”
Morrisons’ executive chairman Sir Ken Morrison said he still believed the two companies would create a “true strong fourth national food retailer”.
“The Safeway board has been put in a difficult position by the extraordinary number of indicative bids that have emerged since we made our offer. They have kept us fully informed of their deliberations and we understand why they have made today’s [Thursday’s] statement,” he added.
Meanwhile, the latest takeover speculation concerns a possible bid for Safeway by UK food and clothing retailer Marks & Spencer.
While a full bid for Safeway is possible, Marks & Spencer is more likely to be interested in acquiring any stores that have to be sold off to satisfy competition regulators, reported BBC Online.
