Sainsbury’s faces fresh takeover interest

Three Delta, a Qatar-based investment group, has bought a 15 percent stake in UK retailer Sainsbury’s, increasing the pressure on the board to realise greater value from its real estate assets.

Sainsbury’s, a UK supermarket chain that recently fended off a £10 billion bid from a private equity consortium, is at the centre of fresh takeover speculation after a Middle Eastern investment group bought a 15 percent stake.

Sainsbury’s: under threat again

Shares in the retailer hit 568 pence yesterday, an eight year high, after Qatar-based investment fund Three Delta bought the stake, reportedly from US fund manager Alliance Bernstein. The Qatari group, which already owned a one percent stake, paid £1.4 billion or 575 pence per share to buy the stock and becomes Sainsbury’s biggest shareholder.

The group has so far refused to comment on its intentions, but the move will increase the pressure on Sainsbury’s board to try and extract additional value from its extensive property portfolio.

Three Delta’s founder and head Paul Taylor is a long-standing associate of Robert Tchenguiz, the property tycoon who has amassed a five percent stake in Sainsbury’s and is now agitating for a restructuring of the company.

Tchenguiz wants the board to sell and lease back some of its property, or else to split the business into an operating company and a tax-efficient real estate investment trust. One analyst report this week, from Morgan Stanley, has suggested that Sainsbury’s could be worth as much as 797 pence per share if it was restructured along these lines.

Tchenguiz has reportedly welcomed the arrival of a second property investor, although the two are not thought to be working in collusion.

Three Delta, which is owned by the Qatar royal family, has been active in the UK before, buying care home operator Four Seasons for £1.4 billion last year. It also bid for Thames Water, but lost out to Macquarie.