The surge came after a national newspaper claimed over the weekend that US private equity firm Apollo “controls” Britain’s second largest grocery chain. Apollo was already trying to buy Asda before it was outbid for £ 6.8 billion by the Blackburn born Issa brothers and their private equity partners.
It is also in talks to join a consortium led by US investment firm Fortress in the potentially ongoing battle to buy Morrisons.
Yesterday’s surge in Sainsbury’s share price lowered Sainsbury’s market value to nearly 8 billion, suggesting investors believe an offer is now possible.
Sainsbury’s share price was just 176 pence last September.
The chain of shops has not commented on the speculation. However, the exchange rules state that it must make a statement when an approximation has occurred.
Neil Wilson, an analyst for the trading website market.com, said, “Sainsbury’s is undoubtedly a good private equity destination with significant warehouse space.”
However, Clive Black, an analyst at broker Shore Capital, said the report was “not only sensational but also pretty flat”.
The Qatar sovereign wealth fund holds the largest share in Sainsbury’s with almost 15 percent of the voting rights, while the Czech billionaire Daniel Kretinsky holds around 10 percent.
Last week, Morrisons’ board of directors accepted a £ 7 billion offer from American private equity firm Clayton, Dubilier & Rice. That trumped a £ 6.7 billion offer on the Fortressled Consortium’s table.
A bond investor who refused to be named told Reuters that he avoided buying Sainsbury’s bonds last month because he believed it might be a takeover target.