Sainsbury's may boost value of bid for Safeway

Sainsbury's has confirmed to analysts that it may increase the value of its bid for Safeway if necessary.

Sainsbury's directors, including chief executive Sir Peter Davis, met analysts not linked with any of the potential bidders on Friday to discuss the Safeway situation.

Numis analyst Mark Hughes, who attended the meeting, said: 'Sainsbury's did not come across as a group that had just jumped in (to the battle for Safeway) like Tesco. We got the impression that they have got a plan B, C, D and E because it is going to be a long process.'

Sainsbury's initially proposed an indicative bid worth in excess of£3

per share, valuing Safeway at approximately£3.2 billion. But Sainsbury's told analysts that sum is not its limit.

Hughes added: 'Sainsbury's have got the capacity to make the deal work worth up to£4 (per share).'

Separately, Philip Green handed in his bid proposal to the OFT on Monday.

Safeway was due to submit its response to Morrisons' offer document to shareholders by today.

Safeway was expected to repeat its advice to await developments, such as the referral of bids by the OFT to the Competition Commission.

- Latest switching data from TNS, commissioned by SchroderSalomonSmithBarney, shows Asda took more spend from rivals than any other grocer. In the year to December 8 2002, Asda made switching gains of£370 million. Tesco gained£328 million, Morrisons gained£75.5 million, Sainsbury's lost£55.8 million and Safeway lost£225 million.