Following the recommendation by Britain’s Office of Fair Trading to refer four of the five Safeway bids to the Competition Commission [WAMN: -03], the latter’s chairman Sir Derek Morris has decided to oversee the inquiry himself.
Morris, whose background in academe and economics, has given him little experience of the sharp end of business, encountered a barrage of critical flak when in 2000 he personally helmed a costly probe into the power wielded by major supermarkets over suppliers. This £20 million ($31.25m; €29.49m) mountain laboured and gave forth a sickly mouse amounting to nothing more than a code of practice.
The supermarket honchos were understandably delighted at Sir Derek’s decision to take the wheel in the latest inquiry. “He certainly knows a lot about the issues that the Office of Fair Trading didn't seem able to resolve, namely the dynamics of local competition,” whooped one.
A commission spokesman concurred: “He [Morris] has obviously got a lot of knowledge of the sector. It makes sense for him to do it,” he fawned.
The commission will examine the four bids for Safeway made by its direct rivals – Tesco, J Sainsbury, Wal-Mart subsidiary Asda and William Morrison, the relatively small northern supermarket chain whose unexpected offer for Safeway sparked the bid frenzy in January.
The fifth bidder, retail wheeler-dealer Philip Green, has theoretically been gifted with a clear field. But few onlookers believe Safeway shareholders will accept any firm offer until they know which (if any) of the other contenders have been cleared to take part in the auction.
Said William Claxton-Smith, representing professional punter Insight Investment: “Shareholders should not be rushed into accepting an offer. We are meant to be long-term investors not snapping the hands off the first bidder to come along.”
Data sourced from: Financial Times; additional content by WARC staff