Tesco to up bid for Low

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The Independent Online
TESCO directors and their adviser, Barclays de Zoete Wedd, meet tomorrow to decide whether to raise the company's pounds 154m bid for Wm Low, the Scottish supermarket group, in the wake of last Thursday's pounds 210m counter-offer from J Sainsbury.

Many City analysts are convinced the auction for Wm Low is far from over. The shares closed the week at 323p, 18p above Sainsbury's cash bid of 305p.

Tony MacNeary, food retailing analyst with NatWest Securities, believes Tesco may bid between 330p and 350p. He also believes that Sainsbury may decide to top even that with a knock-out bid of up to 380p a share.

Wm Low, which operates 57 stores, 45 of them north of the border, is seen as a crucial springboard for both supermarket groups' plans to expand in Scotland.

Until recently, both have preferred to expand through building supermarkets rather than through acquisition. But planning consent has become much harder to obtain.

The historical success rate on planning appeals of between 60 and 65 per cent has plunged to less than 15 per cent so far this year.

It appears to be a two-horse race. Despite speculation that other bidders would join the fray, including Dairy Farms of Hong Kong, Rewe of Germany or even US discounters keen to obtain a foothold in the UK market, it is understood that no other buyer has requested financial details from Wm Low.

Argyll Group, owner of Safeway, is already strong in Scotland and has said it is not interested.

Sainsbury, meanwhile, is taking a relaxed approach. The chairman, David Sainsbury, has just left for a continental holiday.