Delta Two, the Qatar-backed private equity group looking to buy Sainsbury’s, looks ready to change the structure of its proposed takeover bid to win over the UK retailer’s board.
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The fund is understood to be prepared to raise the equity element of its GBP10.6bn (US$21.5bn) planned offer to assuage fears among Sainsbury’s management that its proposal is too highly leveraged.
So far, Delta Two has indicated that 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 fund seems prepared to raise the equity element of its proposal by GBP500m in an attempt to gain access to Sainsbury’s books.
Sainsbury’s is understood to have been wary of Delta Two’s original proposal, fearing that the level of debt would make it difficult for the retailer to invest and compete with larger local rivals Tesco and Asda.
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By GlobalDataTalks between Sainsbury’s and Delta Two, the retailer’s largest shareholder with a 25% stake, are ongoing.
Both sides refused to comment when contacted by just-food today (10 September).
