Safeway could be deep hole for bidders, says Green

Philip Green, the retail entrepreneur, said yesterday that he would only buy Safeway at the right price and that the fundamentals of the business would have to be sound for him to proceed.

Speaking at the Retail Week conference in central London, the owner of Arcadia and Bhs said: "If it becomes available at the right price, we'll be there. But I'm not going to buy Safeway for the hell of it and spend the next 20 years trying to get out of a deep hole."

Mr Green is one of five potential bidders in the £3bn battle for Safeway. As Safeway shares fell 6.5p to 284p yesterday one analyst said: "He has been trying to talk the price down for two or three weeks now and, to be honest, it's the kind of thing you'd expect him to be doing. It's fair game."

The five bids are being reviewed by the Office of Fair Trading. The OFT was originally scheduled to report by mid-March but those close to the bid battle feel it is now more likely to be the end of the month or the beginning of April.

Mr Green, who was named Retail Personality of the Year for the second year running at the Retail Week awards on Monday, said Safeway needed to expand into non-food. "Here's a business with £10bn of sales and millions of customers a week. The people who are succeeding in that market are selling things other than food. People say: 'What do you know about food?'. I say: 'people eat it.' It can't be any more difficult buying an apple than buying a skirt." He added: "You've seen Asda's growth and Tesco's growth coming from non-food. That probably hasn't been done that well at this particular chain."

However, he suggested he would rather walk away than over-pay. "I'm not about to buy things for the sake of buying things. Our approach is always based on 'can we lose money?' not 'how much can we make?'"

He said he had advantages over other private equity buyers. "My advantage is that I've got an operating team and that probably sets us aside from the venture capitalists. And the financial buyers these days don't have a guaranteed exit."

But he refused to rule out other deals though he agreed that his group's share of the UK clothing market might make more acquisitions difficult to get past the competition authorities. "The likelihood of us being allowed to buy anything in the textile sector is remote. I think, to be honest we'll grow what we've got. But we'll see what turns up. The biggest opportunity at the moment is the cost of money [with interest rates at 48-year lows]. I don't see money becoming expensive for two to three years."