LONDON (FNS) -- Tesco stands to double its market share in Scotland after knocking rival J. Sainsbury here out of the contest to acquire the Scottish supermarket chain William Low & Co.
Tesco, based in Hertfordshire, increased its offer for the 57-store Low chain last week to about $381 million (247.4 million pounds at the exchange rate of $1.54 per pound).
Sainsbury said it considered its July 28 offer of about $325 million for Low as "full and fair" and decided not to counter Tesco's revised bid. The Low board said it supports Tesco's offer.
Tesco's bid, in mid-July, of $5.54 per ordinary share of Low was 18% above Sainsbury's cash offer of $4.70 per ordinary share and 60% higher than the original Tesco offer of $3.45 per share.
Tesco also will assume debt of about $77 million.
Some financial analysts here were skeptical about the deal, saying Tesco overpaid. Sainsbury, the analysts said, achieved a strategic victory by pushing Tesco to pay about $150 million more than it originally intended.
Sir Ian MacLaurin, Tesco's chairman, said the "logic for the acquisition remains convincing."
Tesco has experience trading in Scotland, where it operates 16 stores. Those stores hold a 7.1% market share. Low currently has a 6.6% share of the Scottish market, ranking fifth.
The Low stores will be converted to Tesco's banner over the next two years, ending Low's 168-year presence in Scotland.
