Sainsbury's bidder gets takeover deadline

The Qatari-backed fund circling UK supermarket chain Sainsbury’s was today given less than two weeks to formalise its £10.6bn (€15.1bn) takeover interest.

The Takeover Panel said it had set a deadline of 5pm on November 8 – a week on Thursday – for Delta Two to announce a firm offer or walk away.

Delta Two and Sainsbury’s said they agreed it was in the interests of shareholders and staff that they concluded the process “as soon as practicable”.

The Delta Two investment group, which has been stalking Sainsbury’s since July, also said it was seeking increased funding of around £500m (€715m) of additional equity for the proposed acquisition.

It has entered into discussions with its backer, the Qatar Investment Authority, but said there could be guarantee that such funding will be forthcoming.

Delta Two previously revised its proposals in order to gain access to Sainsbury's books, easing the level of debt involved in the approach.

However, concerns have remained over the level of debt involved – nearly £6bn (€8.5bn) – amid the credit market meltdown.

The Sainsbury’s pension trustees are also thought to be driving a hard deal, reportedly demanding around £1.75bn (€2.5bn) for the scheme.

And the Sainsbury’s family, which own around 18% of the supermarket, have made it clear that they will only support a deal if a suitable agreement could be reached with the trustees.

Delta Two already has a 25% stake in Sainsbury’s. The fund is backed by the Qatar Investment Authority, whose chief executive is Sheikh Hamad bin Jassim bin Jaber al Thani, Prime Minister of Qatar and a member of the Qatari royal family.