Wal-Mart Stores, the globe's largest retailer, re-entered the battle for Britain's number four grocery chain, Safeway [unconnected with the US supermarket group of the same name].
The Arkansas-headquartered giant already has a sizable stake in the UK market, owning number two player Asda, through which it approached Safeway on Wednesday with an offer to buy seventy of its 480 outlets for around £2 billion (€1.64bn; £1.15bn) -- a price deemed above their market value.
Many observers see the offer as a spoiling tactic, intended to muddy the present takeover negotiations between Safeway and William Morrison, a northern England-based company boasting the best profit margins on the UK supermarket scene.
It is highly unlikely the Wal-Mart/Asda offer would be approved by the UK Competition Commission or its sibling, the Office of Fair Trading. Nonetheless, those bodies are compelled to consider the latest offer, a situation that will further delay prospects of a done deal with Morrison.
Also, Safeway shareholders may well expect Morrison to match the enticing price offered by Wal-Mart/Asda -- possibly prompting the canny northern group to walk away from the deal.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff
