Sainsbury shrugs off future takeover talk
HEAD honchos at Sainsbury’s have insisted it will not fall prey to private equity as predators circle the sector.
Chairman Martin Scicluna said the supermarket group had been watching the bidding war at Morrisons (0.3pc, or 0.8p, to 264.9p) which follows the takeover of Asda by the Issa brothers in a private equity-backed bid last year.
But, speaking at the company’s annual meeting, he added that bosses are ‘clearly happy’ with the strategy laid out by chief executive Simon Roberts and ‘on the execution of that plan’.
It comes a few days after the FTSE100 company said it would make £40m more in profits this year than expected.
Annual earnings will reach £660m, it said as sales of food and drink rose by 1.6pc in the four months to June despite pubs and restaurants reopening.
The interest in Morrisons has fuelled speculation that its rivals – the largest of which are Sainsbury’s and Tesco (up 1.5pc, or 3.45p, to 237.7p) – could also become takeover targets. Sainsbury’s
shares edged up 0.1pc, or 0.4p, to 284.2p as Scicluna dismissed bid talk and backed the company’s leadership and plans.
He added that Sainsbury’s is ‘working hard to get products back into stores’. The rise of streaming services has also prompted the group to scrap selling CDs and DVDs as people turn online for entertainment. The rise in Sainsbury’s shares followed the trend on an upbeat day that saw the FTSE 100 end on a high.
The blue-chip index rose 1.3pc, or 91.22 points, to 7121.88, recovering much of the losses it racked up on Thursday.
It was nudged higher by big miners and luxury fashion house Burberry, which was boosted by an upgrade from Goldman Sachs analysts. In an investment note to clients, brokers at the banking titan gave Burberry’s shares a ‘buy’ rating, up from ‘neutral’.
They said the company is now at the ‘finishing stages’ of a reset launched by boss Marco Gobbetti and has been undervalued compared with many of its luxury-sector peers. Burberry rose 3.8pc, or 76p, to 2063p.
The FTSE 250 finished up 1.1pc, or 256.6 points, at 22,909.32.
Both of London’s premier indexes were lifted by a rise in travel stocks, particularly airlines.
Easyjet was the favourite among traders after it revealed that bookings to amber-list destinations had increased by 400pc.
The Government said on Thursday that double-jabbed Britons travelling back to England from ‘amber’ countries will no longer have to self-isolate. Easyjet rose 1.8pc, or 16.4p, to 933.4p, while Wizz Air climbed 1pc, or 47p, to 4747p. Ryanair rose by 1.5pc, or 0.24 cents, to ¤16.24, and British Airways-owner IAG by 1.9pc, or 3.48p, to 184.84p. Despite the good news, legal action led by Manchester Airports Group and backed by Ryanair, Easyjet and IAG against Covid travel curbs kicked off.
Gambling software giant Playtech was treading water (closing down 0.4pc, or 1.6p, at 411.8p) after it delayed a vote on a £150m buyout offer for its financial trading division Finalto from a management consortium.
Playtech agreed the deal weeks ago but has since been approached by 5pc shareholder Gopher Investments about a higher, £180m bid.
The ballot has been pushed back by two weeks to July 29 so that investors can ‘consider recent developments’. Gopher also sweetened its offer by promising to pay an extra £7.2m to cover the cost of Playtech withdrawing from the already-agreed deal.
Over on AIM, Evgen Pharma shed a third of its value after the scrapping of a study into whether one of its acute lung infection drug could help treat patients.
Shares fell 34.9pc, or 2.6p, to 4.85 after it reported what boss Huw Jones described as surprising and disappointing trial results.