Sainsbury’s blocked from Somerfield bid
Supermarket operator hopes to keep c-store options open
June 13 2003
Sainsbury’s is trying to recover its position over the dropped bid for rival Somerfield.
The UK’s second biggest supermarket operator has applied for OFT clearance to acquire 171 Somerfield stores, after the consortium led by John Lovering and Bob Mackenzie, which last week had an increased 120p-a-share offer rejected by Somerfeld board, formally withdrawn its offer.
Sainsbury’s has accepted that under Takeover Panel rules it is now blocked from making any overtures to Somerfield for six months unless a new bidder comes forward or the panel rules otherwise.
While Sainsbury’s was widely reported to have been in talks with Lovering over acquiring a package of Somerfield stores in the event of successful bid by the consortium, the company had argued it was not a formal part of the offer.
However, Somerfield’s statement rejecting then offer specifically listed one of the consortium’s conditions as gaining OFT clearance for Sainsbury’s to acquire “a large number” of Somerfield stores. Sainsbury’s was surprised to have been included in that announcement.
Sainsbury’s is understood to have hoped to acquire a package of Somerfield or Kwik Save stores suitable for conversion to its c-store format.
Sainsbury’s said it is now applying for OFT clearance to acquire the stores if the bid is revived at a later stage, or another bidder comes forward.
Somerfield said Sainsbury’s request for OFT clearance for the purchase did not have its support. A statement said: “The board wishes to make clear that this is a unilateral act by Sainsbury.”
Sainsbury’s has also confirmed that it is looking to cut a further 150 head office jobs as part of its ongoing refocusing of the business. The jobs will go in the supply chain, buying and central retail operations units.
