Qatari takeover rumours boost Sainsbury’s shares

Oct 16 2009 by Graeme Brown, Birmingham Post

Supermarket Sainsbury’s saw its shares rocket after rumours circulated about renewed takeover interest from its major Qatari investors.

The UK’s third biggest grocer – which was the subject of two separate takeover attempts in 2007 – rose more 10 per cent at one stage.

The Qatar Investment Authority (QIA) sovereign wealth fund took a 26 per cent stake in the retailer more than two years ago through investment firm Delta Two. The QIA’s chief executive is Sheikh Hamad al Thani, the prime minister of the oil-rich state.

Market talk suggested that the fund was looking to up its stake in the firm, which was likely to lead to a full-blown takeover offer.

A Sainsbury’s spokeswoman said: “We do not comment on market rumour or speculation.”

Delta Two’s £10.6 billion takeover proposal in July 2007 foundered, as did a previous takeover attempt by private equity firm CVCs.

Market rumours suggested a 420p a share approach – valuing the chain at about £8 billion. An offer would also need to win the support of the Sainsbury family, which owns about 15 per cent of the business.

Pali International retail analyst Nick Bubb said: “A full bid with the family supporting it seems unlikely, the Qataris topping up their stake is more likely.”

Sainsbury’s share rise follows a week in the doldrums after the firm said growth would slow as inflation eased.