The retailer said it would like around 35 smaller stores which would fit its focus on the convenience market. The move raises the possibility of the Co-op joining forces with another bidder such as Sainsbury’s or Wal-Mart in order to appease regulators.
Meanwhile, Credit Suisse First Boston the investment bank which has advised Safeway for eight years, has cut its ties with the supermarket chain in order to advise another potential bidder.
CSFB said had resigned as Safeway’s joint broker with immediate effect due to a potential conflict of interest’. The bank is working with US buyout specialist Kohlberg Kravis Roberts, which is considering putting together a bid for Safeway.
US buyout specialists Kohlberg Kravis Roberts has confirmed it has made an approach to Safeway and is considering its position in relation to a potential offer for the company.
KKR is being advised by Credit Suisse First Boston, who yesterday stepped down as joint broker to Safeway, citing a conflict of interest.
City speculation is that KKR will bid around £3bn for Safeway in a deal structured through £2bn of debt and £1bn of equity.
KKR bought US grocer Safeway Inc in 1986 for $4.8bn which was the parent of the British chain. In 1990, KKR took the group public and gradually sold off its shareholding over the years to 1999