The UK’s Takeover Panel, the regulator of M&A in the City of London, has asked the Qatar-backed investment fund eyeing Sainsbury’s to reveal the details of its proposed bid.

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Delta Two was asked to issue a statement to shed more light on its plans after feverish speculation in the UK press about its proposal to buy the country’s third-largest retailer.


Delta, a vehicle of the Qatari royal family and the largest shareholder in Sainsbury’s, said on Wednesday that it had started “preliminary discussions” over buying the rest of the company.


The investment fund said yesterday evening (19 July) that it had made a “comprehensive and detailed proposal” to the Sainsbury’s board, which outlined a potential bid worth GBP6 a share, or GBP10.6bn (US$21.8bn).


Delta insisted it had yet to decide whether to launch a formal bid for Sainsbury’s. However, the fund said it would fund the offer with an investment of GBP4.6bn in equity and shares. It plans to fund the balance through securing debt finance of some GBP6bn.

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Delta insisted it would spend a further GBP3.5bn over the next five years to fund store expansion, refurbishment and to extend Sainsbury’s no-food business.


The fund, headed by Paul Taylor, is believed to have had discussions with Sainsbury’s chairman Philip Hampton about its proposals.


Taylor is also said to have met the Sainsbury family, which owns 18% of the retailer, in Sardinia to discuss its plans. In April, the Sainsbury family rebuffed plans by a private equity consortium led by CVC to buy the retailer.


There has been speculation that Delta would look to offload some of Sainsbury’s lucrative property assets, a strategy that fellow Sainsbury’s shareholder Robert Tchenguiz is believed to favour, but one which the Sainsbury family opposes.


However, Delta is believed to be unlikely to spin off the retailer’s property assets. Taylor said: “Our proposal is focused on growth, not retrenchment. It is backed by a shareholder with the resources and commitment to continue to improve Sainsbury’s market position in the UK with its reputation for quality and innovative food at competitive prices.”