US hedge fund Polygon has purchased a substantial stake in UK retailer Sainsbury’s amid speculation that the group could be bought out by private equity or trade groups.
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Shares in Sainsbury’s have skyrocketed since it was made public that private equity groups CVC, KKR, Blackstone and Texas Pacific were mulling a takeover bid for the resurgent retailer, increasing in value from 437.50 pence (US$8.532) prior to the news to 510.27 yesterday (20 February). Retailer Marks & Spencer has also been linked to a possible counter bid, although such speculation has not been confirmed.
According to a stock market filing, Polygon purchased 9.5m shares in the UK’s third largest retailer on Friday, increasing the group’s stake to 1.5%.
If a bid were to materialise, Polygon would clearly see the benefits. However, opinion is divided about the viability of a takeover, especially given the premium Sainsbury’s stock is currently commanding. A number of investors, including Axa, Brandes, Kaupthing Bank and Baugur are taking this opportunity to offload Sainsbury’s stock while the price is high.
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By GlobalData
