Green denies Safeway interest dwindling

- Last updated on GMT

Related tags: Safeway, Sainsbury's, Tesco

Philip Green, the British retail entrepreneur, has reacted angrily
to reports in the UK press over the weekend that his Trackdean
Investments company was no longer interested in bidding for the
Safeway supermarket group. The Competition Commission is expected
later this week to give the green light to Morrisons' bid for the
company.

Philip Green, the British retail entrepreneur, has reacted angrily to reports in the UK press over the weekend that his Trackdean Investments company was no longer interested in bidding for the Safeway supermarket group.

In a statement, he said that Trackdean noted the press speculation regarding its possible interest in making an offer for Safeway, adding that it was continuing its evaluation of a possible offer for the chain which it first began in January.

Like all the other bidders, Green is waiting for the publication of the Competition Commission's report into the various offers for Safeway before making his final decision. Trackdean was the only bidder not referred to the Commission - Green does not own any other food retail businesses, but has considerable experience in this sector via his ownership of the BhS and Arcadia groups.

A report in the Independent on Sunday​ newspaper cites Green as saying that he had looked at all the financial information provided by Safeway and its merchant bank, HSBC, and that based on this he "wouldn't put any of my money into [Safeway] ... and I wouldn't put anyone else's in either, not if I liked them".

The statement from Trackdean, while not exactly a definitive commitment to a bid for Safeway, at least suggests that there may be more than one offer on the table for Safeway's management to consider.

Morrisons is expected to be the only company given the green light by the Commission when it publishes its report (which could be as early as this week), with Tesco, Sainsbury and Asda/Wal-Mart all expected to be considered too large to buy Safeway. Further bids for the chain could still be forthcoming, although there have been no indications as yet of any interest from elsewhere.

Interim results from Morrisons last week showed that the company is more than capable of increasing profitability at Safeway, should its bid be accepted. But this is by no means a foregone conclusion, with Safeway's worsening position in recent months likely to mean that any bid for the chain will be lower than Morrisons' original offer of £2.85 billion.

The question is then whether Safeway's shareholders would be prepared to sell at any price or risk a further worsening of the company's position as an alternative solution - such as an MBO - is sought.

Related topics: Market Trends

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