No Sainsbury's challenge on Safeway

SUPERMARKETS giant Sainsbury's today ruled out a legal challenge against the Competition Commission report barring it from bidding for Safeway.

The UK's third largest chain issued a brief Stock Exchange statement making it clear that it had 'no intention of seeking a judicial review'.

This follows speculation that the Competition Commission's report into the takeover saga may be challenged by the three unsuccessful bidders.

One area of concern is thought to have been the ruling preventing the trio from bidding for any Safeway stores in the near future - apart from the 53 outlets which rival Morrison would be forced to offload if it landed Safeway.

Asda has also said it has no plans at this stage to challenge the report, which was adopted by Trade Secretary Patricia Hewitt last week. Tesco has not yet commented on the possibility of a judicial review.

The ruling from the Competition Commission gave Bradford-based Morrison the green light to bid for Safeway and nearly all of its 480 outlets.

Morrison is now likely to go head-to-head with retail entrepreneur Philip Green in the fight for Safeway.

Green has yet to table a bid and escaped the competition probe because he did not own any supermarkets.

The battle for Safeway kicked off in January when Morrison offered £2.9bn to buy the chain but within days the lines were being drawn for a protracted battle as its larger rivals piled in.

However, the Competition Commission said last Friday that a takeover by Wal-Mart-owned Asda, Sainsbury's or Tesco would operate against the public interest 'at both a local and national level'.