Deadline set in moves for Sainsbury’s buyout
THE Qatari-backed fund circling supermarket chain Sainsbury’s was today given less than two weeks to formalise its £10.6bn takeover interest.
The Takeover Panel has set a deadline of 5pm on November 8 for Delta Two to announce an offer or walk away.
Sainsbury’s has stores across Tees Valley and in 2004 took over Bells Stores, which has more than 50 North-east employing 1,000 staff.
Delta Two and Sainsbury’s said they agreed it was in the interests of shareholders and staff 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 about £500m of additional equity for the proposed acquisition.
It has entered into discussions with its backer, the Qatar Investment Authority, but said there could be no guarantee that such funding will be forthcoming.
Delta Two previously revised its proposals to gain access to Sainsbury’s books, easing the level of debt involved in the approach.
That change in terms, unveiled in September, saw the possible takeover funded with £4.85bn of shares and payment-in-kind notes guaranteed by the State of Qatar - an increase of £850m.
However, concerns have remained over the level of debt involved - nearly £6bn - amid the credit market meltdown.
The Sainsbury’s pension trustees are also thought to be driving a hard deal.
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.
