A Qatar-backed investment fund is in talks to buy UK retail giant Sainsbury’s.
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Delta Two, which has built a 25% stake in Sainsbury’s said this morning (18 July) that it is in “preliminary discussions” with Sainsbury’s over buying the rest of the company.
Reports have suggested that Delta Two has put an informal GBP12bn (US$24bn) bid to the Sainsbury’s board. The fund insists, however, that there is “no certainty” it will table a formal offer for Sainsbury.
The talks are the latest episode in months of speculation over the future of the retailer, the third-largest in the UK.
Delta Two, a vehicle of the Qatari royal family, amassed its stake in Sainsbury’s last month. The share raid sparked speculation over the fund’s intentions. Delta Two is run by Paul Taylor, a former associate of Robert Tchenguiz, the property tycoon who holds 5% of Sainsbury’s shares.
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By GlobalDataTogether, Delta Two and Tchenguiz hold a 30% stake in Sainsbury’s which, if they teamed up, would trigger an automatic offer for the company.
However, Delta Two and its backers, which include London-based Three Delta, are believed to be acting independently.
Taylor said: “Three Delta is focused on strategic, long-term investments in exceptional businesses, principally in the UK, which have strong incumbent management teams, leading market positions and long-term growth opportunities. All of these criteria are met by Sainsbury.”
It is likely that Delta Two would need to convince the Sainsbury family, which holds 18% of the company’s capital. In April, the family blocked a takeover bid from a private equity consortium headed by CVC.
Sainsbury’s confirmed that it has received a “preliminary approach” from Delta Two. “The board will make a further announcement, as appropriate, in due course,” the company said.
