Morrisons is likely to have to make the first move in offering a renewed bid for Safeway before the likes of Philip Green and private equity companies reveal their hand.

Mark Hughes, analyst at Numis Securities, believed the final bid price for Safeway could be 335p a share, despite Safeway’s share price decreasing by 7% at the announcement of the DTI’s decision at 11.00am.

Morrisons initial bid in January was valued at 277.5p a share, while Safeway’s share price stood at 296.5p this morning but fell 20.5p to 276p after the announcement.

Hughes said Morrisons would want an agreement with the Safeway board in order to gain their support and inspire confidence in the City. But if it attempted to buy Safeway “on the cheap” then the Safeway Board’s support may not be forthcoming.

He expected Morrisons to come in with a bid of around 305p a share for Safeway, but he believed it may finally cost around 335p a share if private equity companies - and perhaps Philip Green enter a bidding war.