Supermarket giant Morrisons might have bitten off more than it can chew with its takeover bid for rival Safeway, city analysts have warned.

Yesterday the Bradford business revealed a £2.9 billion offer for the country's fourth biggest grocer had been put on the table.

But city experts believe the move, which would create a supermarket group valued at £5.5 billion, could be risky.

Yesterday Morrisons shares tumbled 30.25p to 180p. In early trading today, they rose to 186p.

In the past, Morrisons has been against the idea of a takeover, preferring instead to stick to organic growth.

Simon Dunn, analyst at financial firm Dresdner Kleinwort Wasserstein, said: "From a Morrisons shareholder's perspective, we think there is significant integration risk. We rate Morrisons very highly, but it's a big step for a company to triple in size. The risk of damaging the culture is very high. Suddenly it will be trying to implant its culture into a business that has been erratic and poorly run."

If the takeover is completed, Morrisons' would become the country's joint third largest supermarket chain, behind Tesco and J Sainsbury, with a 16.1 per cent share of the market that is equal to Asda. The deal would see the creation of a company with sales of more than £12.6 billion, 598 stores and selling space exceeding 14 million sq ft.

Morrisons has pledged to keep its headquarters in Bradford - with new premises to be built on a 17-acre site at Gain Lane in Thornbury.

Under the terms of the agreement Safeway shareholders would get 1.32 new Morrisons shares for each share they held.

Morrisons will also take on £1.12 billion pounds of Safeway's debt and has secured a one billion pound bank loan to fund the group.

The increase in Morrisons share of the market will have huge implications for the sector, with price wars expected.

Richard Hyman, of research consultancy Verdict, said: "The others will be nervous and disappointed they couldn't benefit from any break-up of Safeway. Morrisons will become a much more potent threat."

Some city insiders even believe Sainsbury or Asda, which is owned by Wal-Mart, might try to scupper the move. A spokeswoman for Asda refused to comment on market speculation that it might mount a rival bid.