Sainsbury's facing second takeover battle in six months

Sainsbury’s is facing its second takeover battle in less than six months after it was disclosed today that a Middle Eastern investment fund was setting its sights on the supermarket giant.

It is understood that Delta Two, an investment vehicle backed by the Qatari royal family, has tabled an offer for Sainsbury’s, reportedly valuing the firm at £10.3bn (€14bn).

Delta Two has put forward a bid priced at 600p a share, according to the BBC.

An offer at just over £10bn (€14bn) would be less than speculated, with rumours suggesting the Qatar fund was set to make an approach worth £12bn (€17bn), including debt.

It is also believed that Delta Two is financing the offer with around £7bn (€10bn) of debt.

The move comes just three months after a takeover attempt by a private equity consortium failed to win the support of key members of the founding Sainsbury family, who are believed to own about 18% of the retailer.

Family members have also reportedly given a lukewarm reaction to the latest plans, even though Delta Two’s reported offer is higher than the 582p that was said to have been on the table from the private equity firms.

The BBC also reports that the group has organised up to £9.7bn (€14bn) of debt and therefore may be prepared to up its bid further to secure the chain.

Delta Two is in a stronger position than the failed private equity suitors as it already owns 25% of the chain, following last month’s purchase of a further 7% stake in the blue-chip company for £732mn (€1,008m).

The fund is controlled by the Qatar Investment Authority, whose chief executive is Sheikh Hamad bin Jassim bin Jaber al Thani, the prime minister of Qatar and a member of the Qatari royal family.