Consortium 'sweetener' claim in Sainsbury's bid

The private equity group circling supermarket chain Sainsbury’s reportedly offered the group’s shareholders an equity stake sweetener in an attempt to see its rejected £9.7bn (€14.2bn) takeover attempt succeed, according to reports today.

The consortium, comprising CVC, Blackstone and Texas Pacific Group, is understood to have put forward plans to allow up to 25% of the company to be owned by existing shareholders and management as part of a 562p-a-share initial offer which was said to have been rebuffed by the Sainsbury’s board for being too low.

It is also thought that the group pledged to invest £3bn (€4.4bn) into the business over five years in a move that would create thousands of jobs.

But the initial approach was reportedly rejected over price at the end of last week after active lobbying from the group’s largest shareholders – the Sainsbury family, with an 18% stake, and property tycoon Robert Tchenguiz, with a 5% holding.

Details of the indicative offer come in the final week before the April 13 “put up or shut up” deadline imposed by the Takeover Panel.

The bidding consortium’s plans to buy Sainsbury’s have run up against a number of problems, not least the withdrawal of one of the original four groups involved, Kohlberg Kravis Roberts, last week.

KKR, which is also bidding to take over Alliance Boots, is understood to have pulled out over concerns its involvement in both deals could cause competition issues, alongside nervousness over price.

The consortium has also had to contend with Sainsbury’s pension trustees, who are rumoured to be worried that the amount put forward by the consortium to help plug the £477m (€700) deficit will not be enough.

Sainsbury’s is said to be open to the possibility of an offer of 580p a share or more, according to newspaper reports.