Supermarket group Morrisons has formally made its £2.4bn offer for rival chain Safeway and "strongly urged" shareholders of both groups to accept.

Morrisons sparked the bid battle for the Safeway supermarket group - the UK's fourth largest chain - three weeks ago with an agreed offer.

The bidders

Morrisons Sainsbury Philip Green Kohlberg Kravis Roberts Asda/Wal-Mart Tesco

Since then, rivals Sainsbury, Asda - owned by US group Wal-Mart -, Tesco and BHS owner Philip Green have all entered the fray along with the US venture capital firm Kohlberg Kravis Roberts.

But Morrisons' bid is the only offer actually "on the table".

And it is pressing ahead despite having been rebuffed when Safeway withdrew its original backing for the Morissons bid.

Lower prices

Under British takeover rules, Safeway now has 14 days to issue a formal response. Morrisons meanwhile has 60 days to pull a deal together.

However, should its offer be trumped by one from a rival, the process is likely to take much longer.

Morrison executive chairman Sir Ken Morrison said:

"A combination of Morrisons and Safeway will create a strong fourth force in national food retailing with lower prices for customers and benefits for suppliers."

Safeway had originally recommended the Morrisons offer to its shareholders when it was announced on 9 January.

But it dropped its backing after five other companies announced their interest.

Falling value

At the time of its original bid, Morrisons' offer was valued at £2.9bn. But the subsequent fall in its share price has reduced its value.

SUPERMARKET SWEEP

9 Jan - Morrisons offer 13 Jan - Sainsbury's confirms interest 14 Jan - Wal-Mart is 'interested' 17 Jan - KKR confirms interest 20 Jan - Philip Green confirms interest 22 Jan - Tesco joins the 'interested' parties

Morrisons now faces competition from Mr Green, who is expected to make a cash offer of about £3.2bn for Safeway, while Tesco and Sainsbury are believed to be offering a mix of cash and shares.

Mr Green has met with the Office of Fair Trading and expects to make a formal submission to clear the way for a bid.

Morrisons' offer identifies £150m of savings through the deal as well as a £100m improvement in trading by January 2007.

The group's shares opened 1% lower at 167.5p while Safeway was also down 1% at 312.5p per share, giving the group a market value of £3.3bn.