Echoes of his £1bn Sainsbury’s disaster

THEY say that lightning doesn’t strike twice. But Robert Tchenguiz’s failed bid to shake-up First Group has an eerie ring to it, writes Ben Harrington.

In 2007, the tycoon built a 10 per cent shareholding in Sainsbury’s worth £1billion. As with his First Group shareholding, the shares in the supermarket giant were bought using debt under a complex deal. His financier then was the Icelandic bank and broker Kaupthing Singer & Friedlander.

The entrepreneur clashed with Sainsbury’s management, arguing that the FTSE 100 giant should ‘realise value’ from its vast property estate, potentially by selling some stores.

Tchenguiz also built a 25 per cent stake in Mitchells & Butlers, owner of All Bar One, Harvester and the Toby Carvery chains, after a failed attempt to buy the company outright for £4.4billion in 2006. But the stockmarket crash following the banking crisis led Kaupthing Singer & Friedlander to sell his stakes in Sainsbury’s and Mitchells & Butlers at below market value. Kaupthing Singer & Friedlander was put into administration in October 2008.

The forced share sale left Robert Tchenguiz nursing hundreds of millions of pounds of losses. He reached a settlement in a legal action against the company.