Morrison makes formal bid.
Supermarket group Wm Morrison has formally made its pounds 2.4 billion offer for rival Safeway, and strongly urged shareholders on both sides to accept.
Setting the regulatory clock ticking in a six-way takeover battle, Morrison yesterday published its official offer document, outlining its all-share proposal.
It came three weeks after the Northern group sparked one of the most intense and intriguing bid battles in the history of UK retailing, with its then agreed bid. Morrisons said it viewed the acquisition of Safeway and its ten per cent market share is a rare opportunity for expansion in an industry governed by strict planning laws.
However, Safeway, the country's fourth biggest grocery chain, has since turned its back on Morrisons to await the outcome of any referral by the Office of Fair Trading to the Competition Commission.
Under British takeover rules, Safeway must now publish a response to the Morrison offer document within 14 days.
Morrison has an initial 60 days to wrap up a deal - but if it is trumped by a formal counter offer, that timetable is likely to be stretched much further.
Executive chairman Ken Morrison said: 'Despite the expressions of interest made by others, the Morrisons offer is still the only one on the table.'
Morrisons' offer identifies pounds 150 million of savings through the deal as well as a pounds 100 million improvement in trading by 2007.
Safeway initially recommended Morrison's bid when it was announced on January 9 but dropped its backing after five other potential buyers stepped forward and said they were considering or planned to table offers.
Morrison is up against retail entrepreneur Philip Green, one of the favourites who is expected to make a cash offer of about pounds 3.2 billion.
However, Green suffered a setback in his plans on Tuesday following news that the competition watchdog had asked him to make a formal application.
Morrisons is also competing with US corporate buyout firm Kohlberg Kravis Roberts & Co, supermarket titans Tesco and Sainsbury - who are offering a mix of cash and shares - and US retailer Wal-Mart's British supermarket unit ASDA.
Morrison shares closed down 9 1 /2p on Thursday at 158 1 /2p, valuing its paper bid at pounds 2.35 billion. But Safeway trades at a market value of pounds 3.35 billion, suggesting investors believe Morrison's bid is only the opening shot in a bidding war. Safeway closed up 2p at 318p while Tesco was down 1p at 165 1 /2p and Sainsbury down 2 1 /2p at 235 1 /4p.
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|Publication:||The Birmingham Post (England)|
|Date:||Feb 1, 2003|
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|Next Article:||Business Digest.|
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