A DECISION on the proposed Superquinn acquisition by Musgrave has been delayed after the Competition Authority wrote to both parties requesting further information.

The authority had until next Monday to complete its “phase one” review of the takeover but Musgrave and Superquinn now have until September 1st to provide further information.

The authority will then have a month to decide whether to approve the acquisition or to initiate a further investigation, known as “phase two”, which could extend up to four months.

The decision to request additional time is unusual.

In 2010, the authority cleared 40 out of the 46 merger notifications it received during the phase one period, usually within one calendar month.

The decision to request further information is believed to centre on possible regional competition issues generated by the Superquinn-Musgrave case.

While the takeover may not breach competition thresholds in terms of Musgrave’s share of the national grocery market, legal sources suggest there may be issues surrounding the enlarged entity’s dominance in specific local economies.

The authority’s decision also means that suppliers who were left out of pocket following the Superquinn receivership face a delay in accessing the €10 million fund established by Musgrave and the receivers.

Superquinn entered receivership in July with debts of €50 million.

While about half this was paid to suppliers, as it related to stock that had not yet been sold, more than €20 million remained outstanding.

Some bigger suppliers were covered by credit insurance. But many of the company’s smaller suppliers had no such cover – due in part to difficulties in securing credit insurance for Superquinn in the months running up to its demise.

Credit insurance company Atradius yesterday declined to comment on how many suppliers were covered by credit indemnity. It is believed that many large suppliers such as co-ops did not have credit cover and could be owed up to €500,000.

A week after it was revealed that Musgrave was to acquire Superquinn, the fund was announced to cover suppliers who were not indemnified by credit insurance.

A Musgrave spokesman said yesterday that the company, which has set up a dedicated phone line for concerned suppliers, has had a “good level of interest” in the fund.

However, the fund will not be activated until the sale of Superquinn to Musgrave is complete.

It is envisaged that payments to suppliers would then be made within four to five weeks.