Bhs tycoon to make bid for Safeway - report

Bhs billionaire Philip Green will make a cash bid of around £3.2bn for Safeway within the next 10 days, it was reported today.

The move could provoke US giant Wal-Mart into showing its hand in the cat-and-mouse game fast developing among the six groups battling for the supermarket chain.

The Sunday Telegraph said Monaco-based Mr Green and key business partner Allan Leighton were meeting with Office of Fair Trading officials this week.

It added the retail tycoon was preparing a bid of at least 300p per share and has already lined up three candidates for the chief executive role.

In an interview with the broadsheet, Mr Green said: “Safeway is a one-off opportunity. It is never going to be available again.”

The fight for the business became a six-way tussle last week when market leader Tesco said it was considering entering the fray.

Sainsbury’s, Wal-Mart and US buyout giant Kohlberg Kravis Roberts have also shown their interest since Morrisons agreed a £2.9bn deal on January 9.

Safeway pulled its recommendation of the Morrisons’s offer last week and upped the stakes on Friday by announcing its property assets were worth more than expected.

It said an independent valuation in October estimated the value of 201 of its top stores at £4.5bn – an increase of nearly £2bn.

Analysts believed Safeway was attempting to push its sale price towards the 400p per share mark – a market value of £4.2bn.

It is thought both KKR and Wal-Mart are poised to publicise how much they are willing to spend but are waiting for each other to lay their cards on the table first.

Mr Green’s move will put pressure on his rivals given his bid is unlikely to be referred to the competition authorities.

The billionaire owns one of the UK’s largest clothing businesses after buying Bhs and Top Shop group Arcadia, but has no interests in the food retail sector.

Bradford-based Morrisons is the only group out of the six to have formally proposed a deal and could still come back with a higher offer.

Its falling share price has pushed the value of its all-paper bid for Safeway down by £500 million in the past fortnight to £2.4bn.

Reports today suggested Sainsbury’s may team up with the regional player in an attempt to beat off its other rivals and divide up the spoils.

A spokeswoman for the chain, whose number two spot in the market is under increasing pressure from Asda, dismissed talk of a tie-up as “rumour and speculation”.