Sainsbury takeover steps up a gear

Updated 11.08 Thu Sep 20 2007

Keywords: Delta Two, supermarket, business, takeover, Sainbury's

The takeover of Sainsbury's has moved a step closer after the supermarket chain agreed to listen to a potential buyer.

Current proprietor J Sainsbury is allowing Qatari-backed investment fund Delta Two access to its books.

"There can be no certainty that any offer for Sainsbury will be made"- former deputy chief executive of Asda Group Tony Campbell

The move follows ten weeks of talks with Delta Two, which already owns one quarter of the company. It is offering £6 a share, valuing the retailer at £10.6 billion.

Tony Campbell, former deputy chief executive of Asda Group, would become non-executive chairman of Sainsbury should the bid succeed.

"Following the submission of a revised proposal by Delta Two, the Board of Sainsbury has unanimously agreed that Delta Two may undertake a limited period of confirmatory due diligence," the companies said.

"There can, however, be no certainty that any offer for Sainsbury will be made."

The change in terms will see the takeover funded with £4.85 billion in shares and payment-in-kind notes, an increase of £850 million on the previous offer.

The shares are guaranteed by the State of Qatar and will not represent a liability of the existing Sainsbury's group.