Morrisons could reduce its original takeover bid for Safeway if it is passed by the DTI at the end of September.

Back in January, Morrisons offered Safeway shareholders 1.32 Morrisons shares for each Safeway share held, which valued Safeway at £2.9bn and each share at 277.5p.

However, Morrisons’ bid has since lapsed while Safeway’s performance has deteriorated. It has posted three quarterly trading statements showing static or negative like-for-like sales growth while valuation experts have suggested that Safeway’s property value has fallen by as much as 25% over the last eight months - leading to speculation that Morrisons will lower its original offer.

A source close to Morrisons did not discount such a scenario and said any bid would have to be commercially attractive to both chains’ shareholders. And any new owner would also miss the opportunity to make an impact on Safeway’s Christmas trading.

City analysts said it was always on the cards that Morrisons would rethink its bid as over eight months had passed since its offer.

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