Blog: Sainsbury's should breathe a sigh of relief
Dean Best | 5 November 2007
Investors in UK retailer Sainsbury’s would have been disappointed that suitor Delta Two has abandoned plans to buy the company.
Shares in the UK’s third-largest retailer slumped today (5 November) after the Qatar-backed fund decided not to proceed with plans for a GBP10.6bn (US$22.1bn) bid.
Indeed, at the current share price, Delta Two faces a loss on its investment in Sainsbury’s, in which it holds a 25% stake and is the company’s single largest shareholder.
Nevertheless, perhaps after the months of talks and speculation, Sainsbury’s is in a stronger position as an independent company, than if Delta Two’s backers had stumped up the extra funding needed to convince its sceptical pension trustees.
Would Delta Two have had the resources to invest further in the company and to fight the likes of Tesco and Asda head on? I doubt it.
The BBC turned to just-food today for insight on the price dispute between Tesco and Unilever....
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