business news in context, analysis with attitude

In the UK the Evening Standard offers an interesting view of what it believes will happen in the acquisition frenzy over Safeway Plc.

By early next month, the newspaper suggests, British regulators will say that the bids by Tesco, Sainsbury and Asda need to be investigated because of concerns about market share and the possible impact on competition. Kohlberg Kravis Roberts, the US buyout firm, may face an investigation as well because of worries that it may not have a workable business model for the company.

This will leave William Morrison Supermarkets and retail magnate Philip Green as the remaining suitors who could close a deal with Safeway easily and quickly. (It is seen as a possibility that Marks & Spencer might get into the fray at this point, seeing an opening.)

The paper concludes, “From the currently-declared hands, (Morrison’s) is the bid that ought to win if markets and regulators are working efficiently.” In other words, the bidder that began the frenzy will be the one that eventually wins out.
KC's View:
We hope so. It’s the bid we’ve been in favor of from the beginning, since it seems to make the UK market more competitive, not less so. And speaking selfishly, more competition gives us more to write about.