Shareholders bid a begrudging farewell to 'Santa' Safeway

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Shareholders in WM Morrison and Safeway yesterday voted overwhelmingly in favour of creating a fourth big force in UK supermarket retailing, as new figures revealed Safeway's market share had hit a fresh low.

In a dingy hotel room in east London, about 50 private investors in Safeway gathered to bid farewell to the company that David Webster, its chairman, co-founded in the late 1970s. As they raged against the Government's regulatory intransigence that cheated them of a competitive auction for their company, in a similarly dowdy hotel room more than 200 miles away in Bradford some 250 Morrisons' shareholders gave Sir Ken Morrison a somewhat easier ride.

Mr Webster, who is 90,000 words through writing up his memoirs, spent the morning of his 59th birthday defending the merger to shareholders mostly upset that they will no longer receive such fat dividend cheques. He conceded that the competition authorities' decision to block all but Morrisons from bidding had placed Safeway in a "straitjacket" but insisted the board had wrought the best deal possible from Sir Ken.

Nevertheless, some Safeway shareholders refused to be pacified, with one claiming: "I think William Morrison is able to sleep very easily. He's just had a gift and his Santa Claus has been Safeway." Another added: "The only people who will get rich out of this deal are the board, [Safeway's] advisors and Morrisons."

Alluding to the soft line the competition watchdog has taken to Tesco's move into the corner stores market, one shareholder said: "Everybody seems to be able to sell things to anybody except for Safeway."

In the event, 93 per cent of Safeway's investors, representing nigh on 100 per cent of the total value of its shares, backed Morrisons' £3bn bid, a result mirrored in Bradford. Such was the extent of support from Morrisons' shareholders for its audacious move that not one question was fired at Sir Ken, meaning the extraordinary meeting was wrapped up in less than five minutes.