Former Tesco chair may join Safeway bidding

Lord McLaurin, the former Tesco chairman, has been approached by a number of possible bidders for Safeway who want him to act as an adviser.

The news came as Mr Philip Green, the retail entrepreneur, yesterday confirmed he was considering making a cash bid for the supermarket chain.

Mr Green, who owns the BHS and Arcadia fashion businesses, hopes to force the hand of other potential bidders by making up his mind on whether or not to launch a bid of about £2.9 billion (€4.37 billion) within 10 days.

The interest from Mr Green who wants to keep and run Safeway - not break it up - comes after the announcement of possible bids from supermarket rivals J Sainsbury and Wal-Mart/Asda and Kohlberg Kravis Roberts, the US buy-out specialists.

Meanwhile, speculation emerged that Wal-Mart had begun buying Safeway shares in the market as Dresdner Kleinwort Wasserstein, its financial adviser, announced last week it had bought 8.1 million shares.

The bidding frenzy was sparked almost two weeks ago by WM Morrison Supermarkets, the Bradford-based chain, when it announced an agreed all-share offer. Announced as a £2.9 billion deal or 277½p a share, the value of the bid has since fallen as low as £2.48 billion as the Morrison share price has fallen. Yesterday, shares in Morrison rose slightly, valuing Safeway at £2.6 billion, or 246p a share.

Lord McLaurin, now chairman of Vodafone, said he had not ruled out getting involved in the bidding. Lord McLaurin, who built Tesco into the UK's leading food retailer before his retirement as executive chairman five years ago, declined to name the people who had approached him.

He said he was reluctant to get involved. "But that doesn't mean I wont get involved," he added. - (Financial Times Service)