Private equity groups could stumble in their GBP11bn (US$21.7bn) takeover bid for UK supermarket group Sainsbury’s as negotiations with pension fund trustees threaten to delay an offer, which must be issued by the rapidly approaching Takeover Panel deadline.
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At the beginning of February, a private equity consortium consisting of CVC, Kohlberg Kravis Roberts (KKR), Blackstone and Texas Pacific Group, first signalled its interest in the UK’s third largest retailer.
Last month the Takeover Panel gave the private equity syndicate a deadline of 13 April to reveal its intentions. However, the size of the retailer’s pension deficit has proven itself a potential stumbling block for any takeover move.
Sainsbury’s trustees recently revealed that the retailer’s pension deficit currently totals GBP410m – a figure that the trustees said could rise to GBP1bn if there were to be a change of circumstances, such as a private equity bid that might require a move to “more conservative” investment policies.
According to a report in The Times, the CVC-led consortium is currently engaged in talks with Sainsbury’s trustees and is expected to request an extension to the Takeover Panel deadline.
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By GlobalDataWhen contacted by just-food today (4 April) CVC declined to comment on the progress of the negotiations or whether an extension to the deadline will be necessary.
