The takeover of the Safeway supermarket chain by Morrisons has produced rich financial dividends for the Bradford-based group and sent its value soaring to nearly £6 billion.

This is the claim of City analyst Data Explorers, which said it estimated the value of the company at £5.7 billion.

Data Explorers also said that Sir Ken Morrison's Bradford-based company had raised nearly £1 billion from the disposal of the 52 Safeway stores demanded by the Competition Commission or which were surplus to requirements.

Morrisons also sold 114 smaller stores to Somerfield and other outlets in separate deals. Data Explorers said the cash raised was significantly ahead of the £600 million anticipated in the City.

It added that if Morrisons could complete arrangements to sell Safeway stores to Asda in Northern Ireland, the net gain could be more than £1 billion.

The exact total will emerge next month when Morrisons announces its full year results for 2004.

The figures, released on March 23, are expected to be ahead of last year's pre-tax profit of nearly £320 million (up 13 per cent on 2003) and turnover of £4.9 billion (up 15 per cent).

Since Morrisons joined the stock market 38 years ago it has increased its turnover and profit every year.

Following the £3 billion offer for Safeway, hedge funds gambled that the Morrisons share price would decrease. They did this by "shorting" the price and selling stock in the company they did not own, planning to buy it back later at a reduced price.

Hedge funds are a complex mechanism designed to make money for investors whether company stock price rises or falls.

But according to Data Explorers the number of hedge funds expecting a fall has dropped sharply and, over the past six months, the Morrison share price has risen healthily.

A spokesman for Morrisons agreed that the net valuation of the company was accurate and that proceeds from the Safeway sale had reached £980 million.