The CEO of Sainsbury has refused to be drawn on whether he has held talks with Delta, the middle-eastern business group that has taken a sizeable stake in the UK supermarket group.

Sainsbury’s has became the subject of renewed takeover speculation since the Qatari investment group upped its stake in the UK retailer to 25% last week. Delta (Two) Ltd, which was already a shareholder in Sainsbury, bought a further 7.1% stake in the business at 595 pence a share, in a deal valued at GBP732m (US$1.4bn).

Delta is a vehicle of the Qatari royal family.

Sainsbury CEO Justin King would only tell reporters yesterday that the Qataris are “great admirers” of the company and remain supportive of its current strategy.

“We never comment on individual shareholder conversations other than what shareholders are happy to say publicly,” he said.

But the fund’s stake-building activity has sparked rumours that Sainsbury’s could be in for another round of takeover attempts. Delta Two was active in pushing for Sainsbury’s to accept the recent takeover bid that was successfully fended off by the group’s management last month.

Delta is run by Paul Walker, a former associate of Robert Tchenguiz, the property tycoon who holds 5% of Sainsbury’s shares. Together, Delta Two and Tchenguiz hold a 30% stake in Sainsbury’s which, if they teamed up, would trigger an automatic offer for the company.

Activist investor Tchenguiz is known to advocate selling off the retailer’s freehold property in order to boost shareholder returns, a move that has, until now, been dismissed by King.