Sainsbury’s denies Safeway legal challenge
‘No intention’ of seeking judicial review
October 3 2003
Sainsbury’s has moved to counter reports that it plans a legal challenge to the ruling preventing it bidding for rival supermarket operator Safeway.
The Financial Times has reported that both Asda and Sainsbury’s are considering seeking a judicial review of the Competition Commission recommendation, accepted by the government, in relation to Safeway.
The report asks the two supermarket operators, along with market leader Tesco, to agree not to buy any Safeway stores other than those each is cleared to bid for from among the 53 Morrisons must sell,
Sainsbury’s issued a terse statement saying it “wishes to make it clear that it has no intention of seeking a judicial review.”
Morrisons was cleared to bid for Safeway, conditional upon disposing of the 53 stores where the commission ruled there would be an unacceptable loss of local competition.
While the three thwarted supermarket operators seem inclined to accept that ruling rather than raise the stakes with a legal challenge, all are known to be concerned that the terms of the ruling also seek to tie their hands in terms of future acquisitions.
There remains the possibility that Safeway could be broken up by a financial buyer, or that a successful bid from Philip Green could see more stores put on the market.
If Morrisons goes ahead with the Safeway acquisition, Tesco, Asda and Sainsbury’s will each be allowed to bid for certain of the stores it must sell, depending on crossover with existing stores. Tesco has been cleared to acquire 21, Sainsbury’s 20, and Asda, which has the biggest geographical crossover with Morrisons, could buy 12. Other operators are also free to bid.
