Tchenguiz blocks Sainsbury’s bid(3)

The real estate entrepreneur has reportedly rejected Delta Two’s offer of £6-a-share, leaving the Qatari firm scrambling to increase its offer.

In yet another setback in the Sainsbury’s acquisition saga, Robert Tchenguiz, the real estate tycoon who recently increased his holding in the company to 11 percent, has reportedly rejected Delta Two’s £12 billion ($26.6 billion, €17.9 billion) bid for the grocer.

The rejection dealt a massive blow to the Qatari firm, which made its bid last week following the unsuccessful attempt by a CVC-led group to purchase the company for £5.82 per share in April. That consortium, which consisted of Blackstone, KKR and TPG, fell apart when KKR decided to pull out.

Delta Two had previously failed to get the backing of the Sainsbury family, which owns 18 percent of the company, but it had hoped to still clinch to deal with the 25 percent of the company it now owns after buying shares in recent weeks. Without Tchenguiz’s 11 percent, Delta will be unable to claim the 75 percent acceptances needed to de-list the grocer by a scheme of arrangement in court.

The latest development will likely put to rest speculation that Tchenguiz is working in tandem with Delta Two. The property tycoon has close ties to Three Delta’s head Paul Taylor, who was formerly the chief executive of the Tchenguiz-owned Rotch Property Group.

In order to continue with the bid, Delta Two will either have to increase its bid or launch a straight takeover which would need a lower acceptance level of 50 percent.

Sainsbury’s £8.6 billion property estate is believed to be the target of the shareholders. Tchenguiz suggested in April after he bought his initial five percent stake that the company should separate its property assets from the main business. Such an action would allow the company to sell off its property holdings and return the cash to shareholders. However the company has insisted its property assets are too important to let go.