Safeway report deadline delayed
Time added on for last minute lobbying
August 12 2003
The next stage of the takeover saga for UK supermarket chain Safeway has been delayed, with the Competition Commission given a six-day extension on delivering its verdict to Trade and Industry Secretary Patricia Hewitt.
The delay was requested by the commission “one of the parties” asked for a second meeting to ensure it got its case across. Asda is known to have asked for another meeting, which took place last week, but the DTI did not specify if this was what the ‘group’ it referred to.
DTI Minister Jacqui Smith said: “I have decided to give the Competition Commission a six day extension to ensure that the views of all parties and the group on the issues that have been raised regarding these mergers are accurately reflected in the final report.”
The four potential trade bidders for Safeway are likely to have to wait for between a month and six weeks before learning whether they will be allowed to add Safeway’s 500-plus stores to their own operations.
With the government keen to avoid political fallout from consumers if choice is seen to be reduced, the indications have been that the fifth biggest operator, Morrisons, is likely to be allowed to proceed with its offer without having to sell too many stores.
Tesco, Asda, and Sainsbury’s would be unlikely to proceed if being ordered to ell off large numbers of stores made a deal uneconomic, even if they were not blocked altogether.
With UK planning policy making sites for new stores hard to come by, the arrival of Safeway on the market is a rare opportunity for the big operators to grow through acquisition rather than the tougher and slower route of organic growth.
Bhs and Arcadia owner Philip Green, who has also indicated that he is a potential bidder, was not included in the Competition Commission inquiry, but has not yet tabled a formal bid.
