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.
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.
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.