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Sainsbury’s takeover bid scrapped as family stays firm

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12/04/2007

The private equity bidders that had been making an offer for Sainsbury’s has dropped its interest in the supermarket after key family board members refused to sell their shares at the asking price.

Blackstone, CVC Partners and TPG Capital said that “it has become clear that the Sainsbury’s board will not back our proposed offer”. The consortium had reputedly bid 582 pence per share, but reports suggested the Sainsbury family wanted more.

The family, which owns 18% of the business, was said to have wanted 600 pence per share, a level the consortium was not prepared to reach and regarded as too much for its UK investment in the business.

A Sainsbury’s statement said: “The key preconditions were outside the control of the board and related to the consortium’s proposed financing structure”.

But the consortium maintained that it had positive investment plans for the business, with the prospect of creating more jobs. “We remain great admirers of Sainsbury’s, its management and employees,” said a spokesperson.

Sainsbury’s has been undergoing a highly successful three-year plan to turn around its previously flagging fortunes. Led by chief executive Justin King, the firm recently reported better than expected sales for the first three months of 2007, with like-for-like sales, exluding petrol, up 5.9%.

 

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