Qataris could make renewed bid for Sainsbury's

24th Jul 2014 17:24

Sainsbury's is expected to soon be approached with a bid from Qatari investors as the UK's biggest supermarket comes under pressure from rivals, market sources told Sharecast/Digital Look on Thursday.An announcement on the bid, which is understood to be about £5 a share, could come as soon as Friday, a person familiar with the situation said.The Qatar Investment Authority in November 2007 walked away from its £10.6bn or 600p a share bid, saying credit markets had made raising funds too expensive. Renewed speculation of an offer from Qataris came in March 2014 following a drop in the company's market share and stocks, due to competition from foreign discounters including Aldi and Lidl.At the time Clive Black, head of research at Shore Capital, said in a note to clients that there is "more merit now than has been the case for some years for Sainsbury's largest investor to dust off 'the file' and consider a much more strategic investment, not least of which is an attractive annual cash return of an asset backed retailer".In June Sainsbury's reported a 1.1% drop in first quarter like-for-like retail sales as the group gave a cautious outlook for consumer trends in the UK. Chief Executive Justin King blamed the fall on lower food price inflation and reduced fuel prices. The UK's largest supermarkets, which also include Tesco and Morrisons, have been heavily slashing prices to regain market share from smaller discounters.Sainsbury's declined to comment on the latest reports.RD