May the Best Bidder Win

Wal-Mart Stores (Bentonville, Ark.) said Tuesday that it may offer to buy Britain's fourth-largest supermarket chain, Safeway PLC, which already has attracted two other suitors.

“Wal-Mart is considering making an all cash offer to acquire Safeway,” Wal-Mart's wholly owned British subsidiary, ASDA Group PLC, said in a statement.

It gave no figure for the amount Wal-Mart is likely to offer, although ASDA CEO Tony De Nunzio said the bid would be attractive and would be funded through cash reserves. He said a bid price would likely emerge after talks with competition regulators.

A Wal-Mart bid to buy Safeway was widely expected after ASDA rivals Sainsbury PLC and William Morrison Supermarkets PLC announced their interest in buying the company.

“I think it's relatively clear the business is up for sale, so the time is now right for us to make this announcement,” said De Nunzio.

Last Thursday, William Morrison announced a surprise offer of $4.6 billion for Safeway, which is not related to the U.S. grocery company of the same name. On Monday, Sainsbury said it was considering making an offer of cash and shares that would value Safeway at around $5.1 billion.

Any Wal-Mart bid would likely have to undergo a lengthy investigation by antitrust regulators that could last months.

ASDA, Britain's third-largest supermarket chain in terms of market share, has 245 stores in Britain, while Safeway has nearly 480 stores. A combined ASDA and Safeway would have a market share of about 26 percent, comparable to that of market leader, Tesco. Sainsbury is the second largest chain with 17.2 percent of the market. Morrison ranks fifth.

Wal-Mart, has more than 2700 discount stores in the United States and also owns stores in Japan, Germany, Argentina and Mexico.