Bid rumours bubble up
Actual and possible bids and deals continue to attract punters to the food retailing sector.
Morrisons saw a rise in its share price after the market woke up to Ameriprise Financial, the fourth-largest financial advisory firm in the US, buying a 4.9% share stake in the supermarket group.
Similar speculation bubbled around J Sainsbury, as takeover rumours continued to circulate around the market.
The gossip surrounds the activities of the Qatari-backed investment fund Three Delta - backed by the rulers of Qatar - which has raised its stake to 25% in Sainsbury's, paying 595p per share. Analysts reckon that Three Delta is aiming to build a stake of just short of 30% - the level at which a full bid must be launched under the takeover rules.
The market wisdom is that the Sainsbury family, which fended off a private equity bid from CVC recently, would sell their stake in the group at 625p a share. The Qatar interest lies in Sainsbury's recently valued £8.6bn property portfolio.
Robert Tchenguiz, the UK property entrepreneur who is reckoned to have a 10% stake in Sainsbury is interested in splitting Sainsbury between its
operations, with an enterprise value of £11.7bn, and its property and return a large amount of cash to shareholders.
Meanwhile, Tesco surprised the market by making a fully priced £155m bid for Scottish garden centre group Dobbies. Tesco already has a 30% stake in Dobbies and plans to roll out the 21-store chain throughout the country to 100 outlets.
A counter-bid could be launched by Sir Tom Hunter, who has a 20.5% stake in Dobbies and who also owns the Wyevale Garden centre and Blooms of Bressingham - together with J Sainsbury, Marks & Spencer or Waitrose. Hunter also has a near 30% stake in Flying Brands, the horticulture mail-order operation.
Hunter held a 10% stake in Dobbies but retaliated to the Tesco bid by doubling his stake to over 20%.
There is market speculation that the deal could open the way for Tesco to sell more products - notably organic food - through an even wider range of outlets.
In other news, another 22 Kwik Save stores are to close to take the total number of store closures to 81 - or a third of the total. However, Brendan Murtagh, the Irish businessman, is thought to be mounting a rescue package with a view to rebran-ding the store chain.
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