Qatar fund may buy Sainsbury stake

QATAR’S €30 billion investment fund is seeking a strategic stake in Sainsbury’s and is studying exactly how much of the British retailer it wants to buy, the emirate’s foreign minister said.

“We think they’re doing well, and this is part of what makes us interested,” Sheikh Hamad bin Jasim bin Jaber al-Thani, who is also chief executive officer of the state-owned Qatar Investment Authority, said in Doha late yesterday.

Blackstone Group, Kohlberg Kravis Roberts & Co and CVC Capital Partners said they’re considering an offer for Sainsbury, Britain’s third-biggest supermarket chain, in what would be Europe’s biggest leveraged buyout. Sainsbury shares have climbed 13% since then, giving the London-based company a value of £8.7bn (€13bn).

The Qatar Investment Authority, or QIA, which doesn’t publish information on its investments, had assets of about 30.5bn in mid-2006, Pacific Investment Management estimated in a report last month.

Qatar, the world’s largest shipper of natural gas and a member of the Organisation of Petroleum Exporting Countries, channels surpluses from energy sales to the Doha-based QIA.

Two funds backed by Qatar — Delta Two and Three Delta — discussed the possibility of a takeover bid for Sainsbury with Marks & Spencer chief executive Stuart Rose, the Sunday Telegraph reported yesterday. Mr Rose reacted “coolly” to the approach, as Britain’s largest clothing retailer has a large enough balance sheet to bid alone, the paper said.

“We are not speculators. We believe it’s a good company,” Sheikh Hamad said.

Gulf state investment agencies such as the QIA, Kuwait Investment Authority and Dubai International Capital “are buying stakes in overseas companies where they feel they’ll get exposure to economies with different growth cycles to their own,” Standard Chartered economist Monica Malik said.

Sainsbury lost its spot as Britain’s market leader to Tesco in 1995 after it was slower to cut prices and extend its offering to clothing and homewares.