BHS poised to enter Safeway battle

Morrisons started the battle for Safeway

High street giant BHS may be about to join four other companies jockeying to take over supermarket chain Safeway, BBC News has learned.

The move would intensify a battle sparked by an agreed offer from the relatively small supermarket chain William Morrison last week.

Philip Green, the billionaire owner of BHS, Top Shop and Burton, is expected to place a bid of more than £3bn for Safeway on Monday.

BBC Business Editor Jeff Randall said competition for the take over had reached extraordinary proportions.

BHS chairman Allan Leighton has food retail experience

He said: "If Mr Green were to buy Safeway it would put him into a completely new league.

"The problem is that up until now he has had no experience of food retail."

Randall said that, despite this, the food retail experience of BHS board member, Allan Leighton, would strengthen any bid.

Mr Leighton is a former chief executive of Asda, who left the supermarket giant to join Royal Mail.

Randall added: "I think the City would look at this pair - the financial firepower of Mr Green and the food retail experience of Mr Leighton - as a pretty effective combination."

Before the BHS development, US venture capital firm Kohlberg Kravis Roberts (KKR) were the latest to confirm an interest in Britain's fourth largest supermarket chain.

Rivals Sainsbury's and Asda's US parent Wal-Mart have also confirmed their interest although neither has made a formal bid.

The bidding for Safeway was sparked by Morrisons' all-share offer last week.

But the value of this bid, about £2.9bn at the time of the announcement, has since decreased as the value of Morrisons shares has fallen and rival supermarkets entered the fray.

Sainsbury, the UK's second largest food retailer, said its offer would value Safeway at £3.2bn though a mixture of cash and shares, while Wal-Mart said it was thinking of making an all-cash offer for the group.