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LONDON - Britain threw cold water on a bidding war for the country's fourth-biggest supermarket chain Safeway Plc on Wednesday, ordering all but one of the five bidders to undergo a competition inquiry, Reuters reports.
The government ordered the Competition Commission to look into all of the four supermarket chains in the bidding fray, including the smallest, Morrison Supermarkets Plc, which had been thought likely to avoid a full inquiry.
Retail baron Philip Green, who owns department stores but no supermarkets, was the only bidder to escape a competition probe.
"This is certainly not the expected outcome," Rupert Trotter, an analyst at fund manager ISIS Asset Management, told Reuters. "This leaves the door open for Philip Green to make a very keenly priced offer."
Trade and Industry Secretary Patricia Hewitt, on the advice of the Office of Fair Trading, ordered the commission to look into rival bids by Britain's top three food retailers Tesco Plc, J Sainsbury and ASDA, which is owned by Wal-Mart Stores, as well as Morrison's offer.
The top four grocery chains already control 70 percent of the 100 billion pounds ($156 billion) UK market, but their options for further expansion are limited by tough building laws, according to Reuters. Safeway has 480 stores and a 10 percent market share.
Hewitt said a takeover by any of the top three chains raised national and local competition issues while one by Morrison, the UK's fifth biggest supermarket group, raised only local issues.
The trade bidders are likely consider putting attractive indicative bids on the table to try and persuade shareholders in Safeway not to sell out to Green before they have returned from the competition probe.
Hewitt said the competition review is due to be completed by August 12.