Kohlberg Kravis Roberts has pulled out of the CVC-led buyout consortium preparing a bid for UK retailer Sainsbury’s, following concerns about possible competition issues.
A source close to the firm confirmed that KKR had pulled out of the CVC-led consortium as it focuses on its ongoing £10.1 billion bid for Alliance Boots, the UK health and beauty chain.
If the firm had also been involved in a bid for Sainsbury’s, both deals would have had to be referred to the competition authorities, which would almost certainly lead to lengthy delays.
Sainsbury’s share price fell on the news; at 12:18 GMT, shares were trading down 3.5 pence at 557.50 pence.
Time is rapidly running out for the CVC-led group, which has just eight days left to submit a bid before its “put up or shut up” deadline on April 13 and has not yet even begun the formal due diligence process. It is now nearly nine weeks since the buyout firms first admitted that they were considering a bid, and six weeks since the deadline was imposed.
Media reports suggest that the sticking point remains the retailer’s pension deficit, with the trustees looking for a much bigger up-front payment than the buyout firms are willing to provide.