Competition commission delays Safeway decision
race has led the UK competition body to delay its recommendations,
which were to be handed to the Government today.
A last minute move by one of the potentials in the Safeway bidding race has led the UK competition body to delay its recommendations, which were to be handed to the government today.
The Department of Trade and Industry has now extended the body's deadline until 18 August in an effort to consider further information submitted by one of the parties. Although the body refused to reveal which of the bidders this was, it is largely tipped as being Asda, currently the number two UK supermarket.
According to a Financial Times report, Asda would neither deny or confirm that it was the unnamed bidder, but did confirm that it had been in talks with the Commission last Friday.
"We are pleased that the Commission has given more time to discuss the issues that were raised last week," the company told the FT.
Tesco's, Sainsbury and Morrison's are all seeking to stay in the bidding race to acquire the ailing Safeway supermarket chain. However analysts and industry observers still believe Morrison's has the edge, as it is the only prospect that meets all the bidding requirements.
In spite of Morrison's strong candidacy, the Commission has hinted that certain 'remedies' may be considered if bidders do not meet all the requirements. One of these could be the disposal of some of Safeway's existing 400-plus stores in order to avoid saturation point in certain geographic areas where potential bidders are already present. It is widely thought that negotiations between the body and Asda last week could well have made a more detailed consideration of this aspect of their potential bid.
"What this shows is that the Commission has not fully made its mind up," said Mark Hughes, analyst at Numis. "There could still be two or more bidders for the company."
Either way, the fact that the Competition Commission has delayed its decision indicates that its decision has not been as clear cut as many had first thought. The bidding war remains tense to the end.
