The Times of London reports that less than a day after Wm. Morrison and Safeway Plc agreed that the latter would be acquired for the equivalent of about $4 billon (US), Wal-Mart’s Asda Group and J. Sainsbury have discussed making a joint bid for Safeway.
If the bid were successful, according to the report, Asda would take 75 percent of Safeway’s 479 stores, with Sainsbury taking the balance.
A Sainsbury spokesman told The Times that the report was “rumor and speculation<” while Asda management could not be reached for comment.
An Asda bid for Safeway has been speculated about for some time, and The Times reports that Asda and Sainsbury discussed a joint bid as long ago as last fall.
If the bid were successful, according to the report, Asda would take 75 percent of Safeway’s 479 stores, with Sainsbury taking the balance.
A Sainsbury spokesman told The Times that the report was “rumor and speculation<” while Asda management could not be reached for comment.
An Asda bid for Safeway has been speculated about for some time, and The Times reports that Asda and Sainsbury discussed a joint bid as long ago as last fall.
- KC's View:
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From the tenor of the reporting, we suspect that it is a lot more than rumor and speculation. The question is whether the two companies are willing to pony up more than $4 billion (US), and then if regulators are willing to approve the sale.
We suspect it will be harder to get this deal past regulators than the Morrison deal would have been, but anything is possible.
The larger issue is what kind of battle a move by Asda and Sainsbury will set off among other retailers -- and, most especially, how Tesco will respond.
