Forget Agincourt, this besieged French supermarket group needs the English

The French supermarket and distribution group, Docks de France, yesterday gave its clearest signal yet that it is on the verge of welcoming a takeover bid from a British company to fend off a hostile offer from its rival French group, Auchan.

There is strong speculation in France and the UK that Tesco, which is led by Sir Ian MacLaurin, is in the throes of preparing a takeover move. The name of Sainsbury's, arch rival to Tesco and headed by David Sainsbury, has also featured in the rumours.

Michel Deroy, the Docks group chairman whose family is the largest single shareholder, said yesterday that all possibilities were open. He advised shareholders against hurrying to accept the hostile pounds 2bn takeover bid launched by the French hypermarket giant, Auchan, three weeks ago.

Mr Deroy said he took exception to the way Auchan - a long-standing rival which has acquired a 17 per cent stake in Docks in recent weeks - was playing "the patriotic card" as it tried to win over Docks shareholders.

"Auchan has given people to believe that foreigners are tantamount to the devil in an attempt to strengthen its own claim to be flying to our rescue and protecting us," he said.

"But," he continued, "I'm not one of those people who relive the battle of Agincourt every day. I am above all an open-minded European."

His comments are a striking departure from commonly met attitudes in French business where foreign firms, particularly from Britain, are viewed in a disfavourable light.

Talks are believed to have taken place already with Tesco, though Mr Deroy would only confirm that he wanted "a partner of our choosing". He also declined to comment on whether another French company, Casino, might be interested. Tesco and Sainsbury's also both declined to comment on the situation yesterday.

Auchan, which launched its hostile bid last week, is engaged in an aggressive advertising campaign to promote its offer of 1,250 francs a share and Docks shareholders have until 30 July to decide.

Mr Deroy has made no secret of his objections to the Auchan bid, which appear to be partly personal and a product of the long-standing rivalry between the two companies, and partly a reflection of his concern that Docks de France remains a separate and distinctive entity.

Yesterday, he said: "We do not see how Docks de France and Auchan could live together. Everything sets them apart; their culture, their business ... Our two firms are as complementary as fire and water, black and white." Auchan, he added, represented "capitalism pure and harsh", while Docks was "family-style capitalism".

Docks de France has an annual turnover of FF6.7bn (pounds 5.85bn) and employs almost 30,000 people in France. It owns the Mammouth chain of 75 hypermarkets in France, 264 supermarkets, including the Atac chain, and 730 smaller shops. It also has supermarkets in Spain and a chain of 50 convenience stores in the United States.

The Deroy family is one of three families that together own the 26 per cent controlling share. Companies, including Auchan, account for a further 21 per cent, with 53 per cent in public hands. The French finance ministry had already asked the Council on competitiveness - the equivalent of the Monopolies and Mergers Commission - to consider the implications of the Auchan stake in Docks de France, but it will not report for six months.

Comment, page 21