When London's Sunday Times put Permira in the frame as a possible £5 billion bidder for the J Sainsbury supermarket chain, it was only the size of the deal that might have taken a few people by surprise. Even for Permira, this would be a transaction of considerable heft.
But the identity of the bidder was less surprising given Permira's keen interest in the retail sector. Over the last year, it has queued at Debenhams and peered into the pensions black hole at WH Smith without actually handing over any cash at the till. Despite this, when a major retail asset comes up for grabs, Permira is what might be termed a “usual suspect”.
This is not a label that can be applied to Lombard Private Equity, which was linked with the deal in the Financial Times. Now, if you thought that submitting a bid for Sainsbury would be audacious coming from an investor with Permira's stature, what would you make of a rival bid from a house that had not previously made an investment at all, in the retail sector or otherwise?
In a briefing note, a City analyst at Churchill Capital decided to play it straight. “The FT reports that Lombard Private Equity is the latest in a number of suitors to be considering a bid for Sainsbury's” it matter-of-factly reported. Only trouble is, Lombard Private Equity doesn't actually exist. It was a spoof creation dreamt up by FT columnist Martin Dickson in his – wait for it – Lombard column.
The following day, Dickson printed the contents of an email to Andrew Procter, director of enforcement at the Financial Services Authority (FSA). Of Lombard's purported bid, he says: “Let me state plainly: this was meant to be a joke. Any similarity to any venture capital group or person, living or dead, was (and is) entirely coincidental and unintentional.”
Later in the same email, he goes on: “Let me be blunt: this column sees no reason why it should be dragged through enforcement because of stupidity or a humour deficit among certain City analysts.”