Fresh bid for Sainsbury's?

30 October, 2009

J Sainsbury's shares rose sharply on speculation that the Qatar Investment Authority (QIA) in which the Qatar Royal Family is heavily involved and which owns 26% of Sainsbury's shares as a result of an earlier, failed bid approach worth £10.6bn in 2007 is planning another bid for the supermarket group.

Dealers talk of an offer of 420p per share, valuing Sainsbury's at over £7.75bn. The 2007 offer was pitched at 600p per share.

Other dealers are trying to dash the hopes of speculative punters by pointing out that the Sainsbury family, which owns 15% of the supermarket group's equity, rejected selling their shares at a much higher level in 2007. Other dealers reckon the Qatar fund is trying to top up its shareholding to 29.9% once the stake goes over 30%, a full bid must be launched.

Qatar Holdings, controlled by QIA, has just banked a £615m profit from its £1.75bn gamble on Barclays' recovery last year. This windfall profit added force to the rumours that it could boost the QIA's cash coffers to make its fresh bid for Sainsbury's.

Another Arab investment fund is also thought to be working on a bid for Sainsbury's with dealmakers in the City.

Co-op paying dividends

The Co-operative Group, a mutual group which is owned by its member customers, saw like-for-like sales, excluding petrol and VAT, rise by 7.3% over the six months to 25 July. The Co-operative has now witnessed 14 consecutive quarters of like-for-like sales growth. Performance was boosted by the recent purchase of the Somerfield supermarket and store chain.

The strong sales threw up a first-half pre-tax profit increase of 17% to £228.8m. Group revenues rose by 27.1% to £6.4bn.

The Co-operative has sold off 200 Somerfield stores to satisfy the competition regulators since it bought the chain last February. This produced £650m.

Lukewarm response to Greggs growth plans

Greggs, the country's leading sausage roll and sandwich company, has revealed it plans to expand by doubling the rate of opening new stores and renovating its existing shops. But stockmarket dealers disliked the plans and marked the firm's share price down.
Greggs also confirmed that third-quarter like-for-like sales rose by 1% and cost pressures are easing.





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