William Morrison Supermarkets PLC offered 3 billion pounds ($5.22 billion) for rival Safeway PLC, Britain's fourth-largest grocery chain, in a bid aimed at ending a takeover battle that has lasted nearly a year.
A Morrisons' executive said Monday that Safeway directors have recommended the offer to Safeway shareholders. Safeway is unrelated to the U.S. company of the same name.
"It's been a 12-month process and we're delighted that we've reached this stage," Sir Kenneth Morrison, the executive chairman of William Morrison, told British Broadcasting Corp. radio.
"We have put forward an offer which the Safeway directors have recommended and which should ... see us take over Safeway in due course," he said.
Monday's bid came nearly a year after Morrisons announced a surprise all-share offer to buy Safeway. The January offer sparked a takeover battle, with Safeway's three biggest rivals — Asda Group Ltd., J. Sainsbury PLC and Tesco PLC — making competing bids. Asda is owned by U.S. retailer Wal-Mart Stores Inc.
The government ruled out the offers from Asda, Sainsbury's and Tesco on competition grounds, but gave them permission to bid for stores Morrisons said it would divest as a condition of the purchase. The decision cleared the way for Morrisons to make a new bid.
As part of the new offer, Safeway shareholders would get Morrisons shares plus 60 pence ($1.04) in cash for each Safeway share — equivalent to the likely proceeds from the disposal of 52 stores required by competition authorities. The combined company would have a total of 552 stores.
Sir Kenneth Morrison said Safeway had compiled a list of parties interested in buying the 52 stores but gave no further details.
"There would appear to be ready market," he told the BBC. "We'll see if that market still exists when the possibility of doing the deals is there."
He added that the larger Safeway stores would likely take the Morrisons name, while smaller outlets would not change name for the time being.