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Published reports say that Wal-Mart has been buying shares in Safeway Plc in the UK as it prepares a cash bid the equivalent of $6.6 billion (US) for the company.

The bid would be the second official bid on the table, joining what is expected to be a combined cash-stock bid by William Morrison Supermarkets. Also expected to bid are Tesco, Sainsbury, and entrepreneur Philip Green.

Wal-Mart is believed by many in the UK to be the favorite to acquire Safeway Plc, in part because it should be able to outbid almost all other comers, and in part because it only owns the country’s third-biggest food chain, Asda; Tesco is believed to be an unlikely winner because it is the nation’s biggest food retailer.

All the bids are subject to regulatory concerns that too much power could be centered in too few companies. The UK’s Office of Fair Trading (OFT) is expected to complete its probe of the situation this week, and at the very least is likely to refer the Tesco, Sainsbury, and Wal-Mart bids to the country’s Competition Commission.

Reuters reports that the conclusions reached by the OFT are not likely to resolve the situation anytime soon because the Competition Commission probe could taker months.
KC's View:
It all depends on which concerns are given priority. If the desire to make sure that shareholders make the most money in any deal, then the decision will go one way. But if the need to encourage competition is seen as more important, the decision will go another.

We don’t see any way that both these concerns can be addressed and satisfied by regulators,

And we were joking about $6.6 billion being petty cash to Wal-Mart. (We think.)