Negotiations have entered their sixth week with neither side able to reach a resolution on Delta Two’s GBP10.6bn (US$21.4bn) proposal to buy Sainsbury’s.
Discussions are believed to have centred on the structure of Delta Two’s proposed offer. Delta Two has said it would fund the offer with an investment of GBP4.6bn in equity and shares. The fund plans to fund the balance through securing debt finance of some GBP6bn.
However, the recent turmoil in credit markets has led to suggestions that Delta Two would find it difficult to raise the finance for any formal bid for the UK’s third-largest retailer.
There is also said to be some opposition in the Sainsbury’s camp to a highly leveraged bid and the retailer would prefer Delta Two to raise the equity element of its offer.
The fund, which already owns a 25% stake in Sainsbury’s, is understood to be mulling whether to increase the amount of equity in its proposals as a way of getting access to the retailer’s books.
Sainsbury’s declined to comment while officials representing Delta Two could not be reached as just-food went to press.