A new buyer for Sainsbury

Another buyer could be in the frame for Sainsbury’s following the recent failed bid by the CVC-led consortium.

But the acquisition of a large swathe of shares in Sainsbury’s today by Three Delta is more likely to be an attempt to force the board to split the company using an ‘Propco’ and ‘Opco’ structure.

The supermarket chain experienced a share hike of around 7% on Wednesday (April 25) after an unnamed buyer acquired a 14% stake in the UK supermarket retailer, prompting rumours of a resurrected takeover bid.

A block of 248.7m shares was sold by asset management fund AllianceBernstein before trading, with speculation that Three Delta, a Qatar-government backed fund, was behind the purchase.

In February, Delta Two fund acquired a 1% stake in Sainsbury. At that time Sheikh Hamad bin Jasim bin Jaber al-Thani, chief executive of the state-owned Qatar Investment Authority, which owns Three Delta and Delta Two, said he was looking at Sainsbury as a potential “strategic investment”, with a preference “to invest in a core business for the long term”.

Three Delta is run by Paul Taylor, the former right hand man of financiers Robert and Vincent Tchenguiz. Robert Tchenguiz has himself built up a 5% stake in Sainsbury in the aftermath of the failed bid from the CVC led consortium. Speculation is that he is interested in separating the operating business from the property portfolio through an op-co/prop-co structure.

He is reported as saying: “Sainsbury has £1.6bn of debt and a capital value of £10bn. In anybody’s book this is a bad capital structure.” He added that Sainsbury was a “real estate company with a retail business on the side”, suggesting that it make better use of its 750 stores in order to increase its share price.

Sainsbury’s chairman Sir Philip Hampton has reportedly met Tchenguiz in the past two weeks to discuss the plan.

Both Tchenguiz and Three Delta were involved in the auction for healthcare business Four Seasons last year, which eventually went to Three Delta for about £1.4bn. It is thought that they were initially going to form a joint bid for the business before Three Delta decided to go it alone. Three Seasons has since divided the operating business from the real estate portfolio.

Sandrine Bradley, Robert Venes