City & Business: Swinging low

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The Independent Online
THE consensus view seems to be that J Sainsbury won't make a counter-offer for Wm Low, the Scottish supermarket group put into play last week by Tesco with an agreed pounds 154m bid. Sainsbury, the conventional wisdom goes, has never been in a contested bid battle and needs to move cautiously in Scotland, where it is a relative newcomer. Wm Low shares ended the week only 28p above Tesco's 225p offer price, suggesting that few expect a counter-offer.

I'm not so sure. The old economics of grocery retailing is dead, killed by tighter planning rules and fears of saturation. Nowadays it makes sense to take over someone else's shops rather than build your own. Moreover, Tesco's bid hardly looks generous. David Sainsbury, who took the helm from his cousin John last year, may be just the man to break with family tradition.

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