Sainsbury on list for private equity buyers

Supermarket giant Sainsbury is today said to be just days away from receiving an £11bn (€16.4bn) takeover offer from a private equity consortium.

The consortium of private equity houses CVC Capital, Kohlberg Kravis Roberts and Blackstone are reported in The Sunday Times to be hoping to approach Sainsbury with an indicative bid by the end of next week.

While the report also said that the timetable may slip past next week, Sainsbury is believed to be considering asking the takeover panel to issue a “put up or shut up” order to its potential buyers to lay down a strict timetable for any potential bid.

The consortium is understood to be struggling to reach an agreement on the value of the supermarket chain, but according to The Sunday Times report, it is hoping to make an offer pitched at about 550p a share.

Shares in Sainsbury closed up 9.5p at 524.5p on Friday, having soared recently on the back of bid speculation, rising from 420p at the start of the year.

Just last week it emerged that a £20bn (€29.8bn) investment fund backed by the Qatar government was reportedly interested in the UK’s third largest supermarket business.

The Qatari fund was said to be looking to build a “strategic” stake in Sainsbury, although it was said to be still considering how big the possible investment would be.

Meanwhile, Marks & Spencer has also been linked to possible approaches for the group, as has a raft of other potential suitors, including Apax and Texas Pacific Group and Cinven.

The supermarket’s freehold property estate – estimated to be worth abound £7.5bn (€11.2bn) – is seen as one of the main attractions of the group.

However, Sainsbury has also bounced back to form under the leadership of chief executive Justin King, lifting profits after a disastrous performance in 2005.