Shares soar on Sainsbury’s bid talk rumours
Shares in popular UK retailer Sainsbury’s rose by 18% following the announcement by a group of venture capitalists that they were considering a massive UK investment and buying the group.
CVC, Kohlberg Kravis Roberts and Blackstone said they were in the early stages of assessing the possibilities of the bid, and the speculation jacked up the retailer’s shares to 526.5 pence, valuing it at around £9.7bn.
The company has been undergoing a transformation and huge UK investment under the auspices of chief executive Justin King, who has cut jobs, closed underperforming stores and improved the supply and distribution chain. He is widely credited with reviving what was until recently seen as the ailing giant of UK retailing.
Many retail analysts have considered Sainsbury’s a possible takeover target for a long time and King has presided over a constantly rising share price since his installation as chief executive.
In a joint statement the venture capitalists said: “No decision has yet been made on the relative merits of an offer. There can be no assurance that any offer for Sainsbury’s will be forthcoming.”
Sainsbury’s did not wish to comment, but the takeover rumours were given impetus when the company announced that the Sainsbury family trust had reduced its shareholding to 13.9%.