Private equity giant Apollo in takeover twist for Sainsbury’s

AMERICAN buy-out fund Apollo has weighed a takeover approach for Sainsbury’s as private equity giants seek to cash in on Britain’s grocery sector.

The New York fund has reportedly run the rule over the UK’S secondbiggest supermarket chain after its bid for Asda was trumped last year by the Issa brothers and TDR Capital.

Apollo appeared poised to join a takeover consortium led by the investment firm Fortress to buy Morrisons after ruling out a solo bid for the Bradfordbased grocer. Apollo’s interest in Sainsbury’s is exploratory, according to the Sunday Times.

Meanwhile, talks continue over teaming up with Fortress for a fresh swoop on Morrisons.

The takeover twist comes after former Tesco boss Sir Terry Leahy burst into the lead to buy Morrisons after a £7bn offer from buy-out fund Clayton, Dubilier & Rice was backed by the supermarket’s board. Morrisons agreed to a 285p per share takeover offer on Thursday from CD&R, which counts Sir Terry as a partner, following a bidding war with rival suitor Fortress.

Sir Terry is now in pole position to become the next chairman of Morrisons should CD&R’S approach prove to be the winning bid. He was at the helm of Tesco for 14 years as chief executive.

Sainsbury’s shares have climbed by nearly a third since the start of the year to 294.7p on the prospect of a takeover bid for the 152-year-old chain.

Speculation has been mounting since the Qatari Investment Authority (QIA) ceded £300m worth of Sainsbury’s shares in April to a billionaire investor known as the “Czech sphinx”.

The swoop by Daniel Kretinsky’s firm Vesa Equity Investments boosted his stake in the grocer to nearly 10pc.

While the QIA – the Qatari state’s $320bn (£232bn) sovereign wealth fund – continues to hold a 15pc stake, rumours are building that it could prompt a further sell-off this year.

The QIA has been one of the biggest shareholders in Sainsbury’s since it mounted a failed takeover bid in 2007.