A BATTLE for control of Scotland's last large independent supermarket
chain was in the offing last night, as Sainsbury pondered its reaction
to a #154m takeover bid by Tesco for the Dundee-based chain, William
Low.
Wm Low's directors, led by chairman James Millar, have recommended
that shareholders accept the Tesco offer, but Sainsbury indicated it
might make a higher bid, which would spark an auction.
Wm Low's shares closed in the stock market 11p above Tesco's 225p
price, indicating that the market at least expects Sainsbury to
intervene.
Any fight for control of the group is likely to be welcomed by the 300
staff at the Dundee headquarters, where almost all would lose their jobs
in a Tesco takeover.
However there was speculation that should Sainsbury mount a successful
challenge, it might retain some administrative staff to run its enlarged
Scottish operation. The 2000 full-time and 6000 part-time staff in the
company's 57 stores would be largely unaffected by any change in
ownership.
Tesco already has 16 stores in Scotland, and buying Wm Low would add
another 45, whereas Sainsbury has only recently moved north of the
Border. With three stores and a fourth opening this year, it is keen to
expand. Wm Low would provide a ready made network.
The supermarket price wars have cost the smaller scale Wm Low
operation its independence, unable to match the prices offered by the
English giants. Tesco claims Wm Low's shoppers will see 8% off their
checkout bills after the takeover as a result of economies of scale.
Mr Millar readily accepted the sadness of the occasion: ''It's not a
good day for Wm Low and it's not a good day for Dundee -- there's no
point in my trying to pretend otherwise. My personal reaction is one of
sorrow. It is a sad day for William Low plc, as we know it, and for
Dundee.
''All my working life has been spent in this city and no-one has to
lecture me on the social impact and the personal distress that these job
losses will cause. But we live in a corporate world and we live by
corporate rules.''
The company was founded in the city in 1868 as a two-shop operation by
William Low and James Rettie, They expanded in the late nineteenth
century to a chain of around 100 branches stretching from Dingwall to
the Borders.
The partnership became a limited company in 1919 and in the late
fifties it began transforming itself from counter service shops to
modern supermarkets, only going public in 1973.
Sainsbury has requested financial information from Wm Low, and expects
to make up its mind shortly. A spokeswoman said: ''Wm Low is something
we have looked at before. It is an obvious candidate for a takeover and
has been for some time. We have looked at it in the past, and, as a
result of the takeover news, we are reviewing the situation.''
Another possible bid candidate, Argyll, which runs Safeway stores and
already has 60 outlets in Scotland, ruled itself out yesterday. But the
Sainsbury statement is unusual in takeover situations, when an early
denial of interest or ''no comment'' is the norm.
Wm Low is an important customer for Scotland's food industry, and
Tesco's chairman, Sir Ian MacLaurin, indicated his firm would continue
to use these suppliers.
Store wars17
Road to Dundee18
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