Blog: Groundhog Day for Sainsbury's as Qatari takeover rumours resurface

Michelle Russell | 14 September 2012

UK retailer Sainsbury's has once again become the subject of renewed takeover speculation about the intentions of the Qatar Investment Authority (QIA) - its largest shareholder.

The retailer's share price climbed to a high of 338.5p yesterday (13 September) before closing up 5.4p to 337.5p on speculation that the QIA could up its stake from the 26% it currently holds.

The rumours come nearly five years after the QIA launched a bid for the supermarket chain but then backed away, blaming the credit crunch.

It is understood Qatar is mulling a bid of 450p to 500p per share, somewhat of a drop from the 600p it offered back in 2007.

The resurfacing of the reports may come as little surprise to many in the industry who may view this 'Groundhog Day' occurrence as suspect, given the fact the investment company has habitually reported to be plotting another approach. It is also already locked in takeover talks elsewhere over the acquisition of Anglo-Swiss mining multinational Xstrata.

According to The Financial Times today, Sainsbury's finance director John Rogers suggested there may have been a more credible reason for the demand.

Speaking at a Citigroup consumer conference, he said Sainsbury remained "on track" to meet expectations of 4.5% profit growth this year, outpacing rivals, and dismissed fears of a price war.

Sainsbury's declined to comment on the reports and the QIA could not be reached for comment.