Sainsbury confirms bid approach from Qatari group

18 July 2007

The UK''s third-largest grocery supermarket chain, J Sainsbury Plc, the parent company of Sainsbury''s Supermarkets Ltd that operates the Sainsbury''s stores and supermarkets, has received a preliminary takeover approach from Qatari investment group Delta Two, the government owned investment vehicle.

Confirming the approach, the supermarket chain said in a statement today that the latest approach "may or may not lead to an offer being made" and that it would make a further announcement in due course

According to earlier reports, Delta Two, which already owns about 25 per cent of Sainsbury and is considered a potential bidder, had indicated being prepared to offer 610 pence a share, valuing the group at around £12 billion.

In June the Qatari royal family had raised its stake in Sainsbury to 25 per cent from 18 per cent, fuelling speculaztion about a possible takeover.

According to a report in the UK business daily Financial Times today the proposal from Delta Two did find favour with the Sainsbury family, which owns around 18 per cent of the company, though the management headed by chief executive Justin King, was willing to discuss the offer.

Three months earlier, the family had rebuffed a 582 pence a share approach amounting to £10.1 billion from a private equity consortium led by Europe''s second-largest leveraged buyout firm, the London-based CVC Capital Partners.