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Sainsbury’s left in the cold as Delta Two pulls out of take over

07 November 2007
The value of the Sainsbury’s group fell by £2 billion pounds yesterday when a £10.6 billion take over bid for it was dropped by Delta Two, under the Qatar Investment Authority.

Delta Two – the Qatari-backed fund that was poised to become the new owners of Britain’s third largest supermarket group – said that to continue with the bid would not be in the best interests of their stakeholders.

Qatar also refused to put up an extra £500 million which in the final stages of the take over Sainsbury’s said was needed in order to boost pensions, provide working capital and fuel Sainsbury’s competition with its leading competitors, Tesco and Asda.

Sir Philip Hampton, Chairman of Sainsbury's said that despite a second failed take over inside a year, the supermarket “has attractive future prospects and the recovery strategy commenced in 2004 is well advanced and continuing to deliver growth in the business.”

Sainsbury’s share price fell by almost a fifth to 440p – 26p lower than the 600p per share that Qatar had agreed to pay – when news broke of the failed takeover after 17 weeks of talks, leaving both sides frustrated.

Sainsbury’s has been approached by two potential buyers this year, the other being an offer by private equity group CVC, which fell through in April due to opposition from the Sainsbury’s family which holds an 18 per cent stake in the company.

Sainsburys Banking

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