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LONDON -- The U.K. government announced today that the country's three largest supermarket chains had agreed not to bid for Safeway, allowing their smaller rival, William Morrison, to make a new offer later in the month, Reuters reports. Morrison has 21 days to bid again for Safeway.
Trade and Industry secretary Patricia Hewitt has accepted undertakings from Tesco, Asda, and Sainsbury not to buy Safeway, or any part of the No. 4 supermarket group that could hurt competition.
Family-run Morrison, the United Kingdoms's fifth-biggest food retailer, additionally agreed to sell 53 stores if it purchased Safeway, the Department for Trade and Industry announced in a statement.
Morrison, which began as an egg-and-butter merchant in the northern English city of Bradford, opened the bidding on Safeway in January with a 2.9 billion-pound ($5 billion) all-share offer, which has since lapsed. Industry analysts believe the chain will make a fresh bid on similar terms, though perhaps with a cash element. However, U.S. mutual fund company Fidelity, which owns around 14 percent of Safeway, has encouraged the food retailer to seek an offer of about 3.0 billion pounds, the Observer newspaper reported on Sunday.