Sainsbury’s in £1bn takeover talk surge
US BID RUMOUR TRIGGERS JUMP IN SHARES
THE value of Sainsbury’s soared by £1billion yesterday after reports of a possible takeover bid.
Shares in the supermarket giant jumped 15 per cent to a seven-year high of 340p.
The surge came amid claims US private equity heavyweight Apollo was “running the rule over” Britain’s second biggest grocery chain.
Apollo already tried to buy Asda before it was outbid by the Blackburn-born Issa brothers and their private equity partners for £6.8billion.
It is also in talks about joining a consortium, led by US investment firm Fortress, in a big-money battle to buy Morrisons.
Yesterday’s leap in Sainsbury’s share price took its stock market value to nearly £8billion. It suggests investors believe a bid is possible. Sainsbury’s share price was just 176p as recently as last September. Sainsbury’s has not commented on the speculation. However, stock market rules say it would have had to issue a statement if there had been an approach. Neil Wilson, an analyst at the website markets.com, said: “Sainsbury’s is undeniably a good target for private equity with a considerable store estate.” But Clive Black, analyst at broker Shore Capital, dismissed the report as “not only sensationalist but quite shallow”. Qatar’s sovereign wealth fund, the biggest shareholder in Sainsbury’s, saw its stake jump by £150million yesterday, while Czech billionaire Daniel Kretinsky’s holding rose by nearly £100million. Last week the board of Morrisons accepted a £7billion offer from American private equity firm Clayton, Dubilier & Rice. That trumped a £6.7billion offer on the table from the Fortress-led consortium.