Philip Green drops Safeway bid
Entrepreneur walks away as ruling limits sell-ons
October 30 2003
Retail entrepreneur Philip Green has abandoned plans to make a bid for Safeway.
The owner of the Bhs and Arcadia chains confirmed in a statement to the stock exchange that his bid vehicle Trackdean “has now decided not to proceed with an offer for Safeway.”
Green has been free to bid since early in the summer, but waited for the Competition Commission ruling, which was confirmed by Secretary of State Patricia Hewitt last month.
That freed Morrisons to proceed with an offer for Safeway. It also left rivals Tesco, Sainsbury’s and Asda being asked agree not to acquire any Safeway stores other than some of the 53 that Morrisons must sell in order to acquire Safeway.
The undertakings being sought from the ‘big three’ in relation to Safeway are likely to be a factor in Green’s decision, since they would severely limit the potential to sell on any of the stores.
The Trackdean statement said it had met with OFT representatives “to clarify its understanding of the Secretary of State’s decision,” and is dropping plans for a bid “based advice from its professional advisers.”
While Green had indicated he planned to put a management team in place to run the Safeway stores, it was widely thought he would look to sell on some stores to help finance the bid.
UK consumers are showing an increasing tendency to buy clothes alongside their groceries, and operating a supermarket chain would have given Green a new channel for his clothing ranges, operating alongside Bhs and Arcadia’s high street outlets.
Figures from sales tracker Taylor Nelson Sofres show that Bhs has seen its share of the childrenswear market drop over the past six months, a period which included the crucial back-to-school period. At the same time, Asda’s George clothing brand is taking an increasingly bigger share of this sector.
Morrisons new bid is expected in the next three weeks. However, the OFT is said to be having problems getting the other supermarket operators to sign on the dotted line in relation to the undertakings not to buy Safeway stores.
