UK's Safeway Says Property is Worth More than Bidders Estimated

LONDON - Britain's fourth-biggest grocer and hotly contested takeover target, Safeway Plc, on Friday announced that its property assets are worth far more than its six bidders have figured.

Safeway said an independent valuation of just 201 of its 479 stores put the real estate value at 4.5 billion pounds ($7.34 billion), almost two billion pounds higher than their current net book value.

This would give the company's property portfolio a net value of 391 pence per share, or 4.13 billion pounds -- well above the current market value of about 3.4 billion pounds for the entire company.

"This property valuation, with its two billion pound surplus, underlines the substantial value within Safeway's store portfolio," Safeway chairman David Webster said in a statement.

"We would expect our shareholders to benefit from this under the terms of any proposal," he added.

The remaining 278 stores have a current book value of 962 million pounds and non-store assets have a book value of 565 million pounds, Safeway said.

An all-share bid from William Morrison Supermarkets Plc initially valued Safeway at 2.9 billion pounds, although the value of that bid has fallen with the Morrison share.

Safeway initially recommended acceptance of that offer, but withdrew the advice on Thursday in the light of the rival bid interest from other major players.

Other potential bidders, none of whose proposals has exceeded 3.2 billion pounds, include J Sainsbury Plc, Wal-Mart's ASDA, U.S. corporate buyout specialist Kohlberg Kravis Roberts & Co, Tesco, and British retail entrepreneur Philip Green.
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