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LONDON - UK supermarket giant Safeway PLC on Friday dismissed speculation from press reports that the group may be about to become the target of a takeover offer by Wal-Mart-owned Asda Group PLC.
The Daily Mail, a London newspaper, reported Friday that the owners of Asda are said to be considering a GBP2.8 billion ($4.4 billion) takeover of Safeway, and have contacted the Office of Fair Trading to see whether the deal would be allowed. The combined group would have a 25 percent market share, putting it head to head with market leader Tesco PLC.
A spokeswoman for Safeway said the story was "pure speculation" and that the company may make a statement later Friday, Dow Jones newswires reports. Asda, which is owned by U.S. giant Wal-Mart, was unavailable for comment.
Shares of Safeway were up 2.9 after news of the takeover speculation.
One analysts told Dow Jones that Asda and Safeway would be compatible businesses. While Asda tends to have larger out-of-town stores, Safeway has smaller in-town units, so the combined business would have a strategy to rival Tesco, he noted.