Sainsbury's fuelled by more bid rumours

Shares in Sainsbury’s staged a fresh surge today amid ongoing speculation about takeover interest in the supermarket chain.

The latest moves involve a £20bn (€29.6bn) investment fund backed by the Qatar government that was cited as having an interest in the UK’s third largest supermarket business.

According to the Daily Telegraph the Qatari fund is looking to build a “strategic” stake in Sainsbury’s, although it was said to be still considering how big the possible investment would be.

The news came as Sainsbury’s was said to be considering asking the City regulator to issue a “put up or shut up” order to its potential offerors.

Private equity houses CVC Capital, Kohlberg Kravis Roberts and Blackstone declared their interest in a potential bid for Sainsbury’s to the stock exchange just over two weeks ago in a deal that could value the firm at £11bn (€16.3bn) including debt.

Speculation that Sainsbury’s could become a potential takeover target caused shares to rise to their highest point since 1999 after the private-equity trio confirmed they were assessing a possible offer.

Within days reports cited a number of other interested suitors, including Texas Pacific Group and Cinven, Apax and Marks & Spencer.

However, Sainsbury’s shares began to cool on Friday after Cinven reportedly dropped plans to make a bid for the group.

The supermarket’s freehold property estate, which has been estimated to be worth around £7.5bn (€11bn), is seen as the main driving force behind interest in the group.

Under the leadership of chief executive Justin King, the retailer has bounced back to form after profits plunged in 2005. The store has 769 site across the UK.

The stock was up more than 1%, or 8p to 512p.