No truth in merger report, say Safeway and Asda

SAFEWAY, the underperforming supermarket group, said yesterday there was no truth in a newspaper report that it was poised to announce a pounds 10bn merger with rival Asda. "We categorically deny there is any truth in this. It is recycling of previously incorrect speculation," a Safeway spokesman said. Asda also dismissed the report saying it was simply "a rehash of old news."

It is understood that no talks have taken place either between the two companies' managements or their advisers. The two groups have not re-started the process of seeking confidential guidance from the Government over whether an Asda-Safeway merger might gain the approval of the regulatory authorities. However, Safeway shares gained 1.75p to 370.75p while Asda rose 4.5p to 193.5p. Safeway is due to report full year results tomorrow.