The Week In Review: Who'll win the war for Safeway?

Trolleyloads of papers will be dumped on Patricia Hewitt's desk on Monday morning, outlining the Competition Commission's verdict on whether the Secretary of State for Trade and Industry should allow Safeway to be swallowed by one of its rivals, or not.

The UK's number four supermarket chain has topped the shopping lists of William Morrison, Tesco, J Sainsbury, Asda and the Bhs owner Philip Green.

Bradford-based Morrison's sparked the multi-billion pound takeover frenzy in January by proposing to merge with Safeway in an all-share deal then worth £2.7bn.

But should investors stockpile some Safeway shares before Ms Hewitt announces her judgement next month?

The worst scenario for shareholders would be a blanket ban on all bids, likely to send Safeway shares down to about 200p on trading grounds alone.

Happily this is unlikely to happen: the commission said a Morrison acquisition would be "pro-competitive" in its June remedies letter.

Clearance for Morrison alone, whose bid is worth just under 250p per share, would preclude a bidding war among trade buyers but analysts predict the presence of Mr Green and any number of deal-hungry private equity houses would limit the stock's downside to 230p to 240p. After all, Safeway has a net asset value of 400p a share.

Best of all would be the green light for Asda and Sainsbury's alongside Morrison (no one seriously thinks Tesco has a chance). Although the number two and three operators would have to sell a significant chunk of Safeway's 481 stores, their presence could boost the take-out price as high as 390p per share.

While it is obviously risky to try to play these situations, speculative investors could well find Safeway a lucrative punt. Buy.

NewMedia Spark

NewMedia Spark was the leader of the dot.com-era fashion for "incubators", companies set up with a big pot of cash and a little expertise to parcel out among start-up technology companies in return for equity stakes. Barely half its 80 investee companies still exist and it is still too early to say if there are diamonds in the portfolio, but the chip-maker Aspex is among a number that look promising. NMS has assets of 12.4p per share, a third higher than the present share price, and that asset valuation was made at the bottom of the market. Things should be on the up from here.

Baggeridge Brick

At the peak of the Lawson boom in the late Eighties, the UK used 4.7 billion bricks every year. Demand has slumped to 2.8 billion, now the commercial construction industry prefers steel and glass edifices and residential house-building has only just bounced off historic lows. The brick-makers have only now cut enough capacity out of the industry to stabilise the price of bricks but Baggeridge Brick, the UK's No 4 player, has seen its shares jump to an eight-year high. With brick prices now likely to rise, and scope for more increases to profit forecasts, Baggeridge shares are a buy.

Balfour Beatty

Balfour Beatty saw its shares sold off last month when it emerged that its rail infrastructure division and some former employees are to face manslaughter charges over the 2000 Hatfield train accident. Yesterday's interim results showed that the sellers were being far too short-termist. This is a company with annual revenues of £3.5bn. Hatfield and its implications are not fundamental to the Balfour Beatty story. Despite the effective renationalisation of the rail network, the expertise of the likes of Balfour Beatty will still be needed, and the company is also looking forward to £1.5bn of contracting work on the giant public private partnership to manage and upgrade London Underground. Hold.

Torex

There is a mini-revolution going on in the National Health Service. The Government has rearranged the way hospitals buy information technology and ring-fenced new funds to do so. Torex, one of a number of UK companies which supplies important software to hospitals and doctors in the UK, looks likely to be a loser in this process, so its mooted merger with iSoft is more important to Torex than it is for iSoft, which has developed much more innovative technology. Torex brings to the pairing a wider customer base and a sharper understanding of hospitals' present IT systems. Torex shares are worth holding, but new investors ought to prefer iSoft.

CD Brammall

Tony Bramall, chairman of the company who steered its transformation from textiles maker to car dealership 10 years ago, says sales of cars have been accelerating in the past six months as consumers take advantage of very low interest rates to finance car purchases. The business owns 93 car dealerships and new and used car sales have improved. No signs yet of debt-burdened consumers putting the brakes on spending. CD Brammall shares are cheaper than rivals Pendragon and Reg Vardy. The lights are still green for investors who want to buy.

VT Group

VT Group, the old Vosper Thornycroft, is only a few weeks away from breaking the champagne bottle over its new shipbuilding facilities in Portsmouth, so the shipbuilding backbone of VT Group looks a lot more secure. All of which should be a source of comfort to investors who might otherwise have cause to avoid the VT growth story, which has seen the group move into the world of support services, helping to run defence facilities and military training programmes. In the UK, there are more potential contracts than VT could hope to bid for. Hold.

Morgan Sindall

As with the UK economy as whole, so with Morgan Sindall. The great spending splurge by the public sector is holding things together while conditions are miserable among the construction group's private-sector customers. Affordable housing projects, hospital construction work and rail and road-building schemes are all helping to lift the numbers. There is also strong growth from the infrastructure services division, which has been tunnelling at Heathrow Terminal 5. The main worry is falling turnover in the office refits division. Hold.

NWF

NWF IS "a four-legged animal", says its chief executive, Graham Scott, and can get about even if one of its legs has a limp. He can be forgiven the metaphor, since the group was formed in 1871 as a farmers' co-operative and hundreds of the UK's dairy farmers are customers of its animal feed business, one of the four legs. The Cheshire-based conglomerate also distributes fuel for Texaco, warehouses and transports groceries to supermarkets, and owns garden centres. It may look a peculiar beast, but it is a hard worker for shareholders, and there is a well-covered dividend yielding 4 per cent at the present share price. Cheap.

Turbo Genset

Turbo Genset was spun out of Imperial College, London, and has developed generators of a size suitable for small office blocks, factories, shopping centres and other public buildings. When we tipped it at 430p two years ago, we thought we were being "green" in the environmental sense. We were naive. Commercialism has proved tougher than the group. Shipments of the pioneering 400kW generators have begun but much depends on unproven distribution deals with players in India and the Middle East. Wait.