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| Bid talk lifts Sainsbury's shares | |
| (10 minutes later) | |
| Shares in Sainsbury's have risen by 18% after a group of private equity investors said they were considering a takeover bid for the supermarket chain. | Shares in Sainsbury's have risen by 18% after a group of private equity investors said they were considering a takeover bid for the supermarket chain. |
| CVC, Kohlberg Kravis Roberts and Blackstone said they were in the preliminary stages of assessing a possible bid for the UK firm. | CVC, Kohlberg Kravis Roberts and Blackstone said they were in the preliminary stages of assessing a possible bid for the UK firm. |
| The speculation pushed Sainsbury's shares up to 526.5 pence, valuing the firm at about £9.7bn ($19bn). | The speculation pushed Sainsbury's shares up to 526.5 pence, valuing the firm at about £9.7bn ($19bn). |
| Sainsbury's is Britain's third-biggest grocery chain, after Tesco and Asda. | Sainsbury's is Britain's third-biggest grocery chain, after Tesco and Asda. |
| The company is close to completing a three-year turnaround plan that has gone a long way towards reviving its fortunes. | The company is close to completing a three-year turnaround plan that has gone a long way towards reviving its fortunes. |
| Under chief executive Justin King, Sainsbury's has cut jobs, closed underperforming stores and improved the supply and distribution chain. | Under chief executive Justin King, Sainsbury's has cut jobs, closed underperforming stores and improved the supply and distribution chain. |
| The share price has been rising consistently while Mr King has been in charge. | The share price has been rising consistently while Mr King has been in charge. |
| 'No decision' | 'No decision' |
| Justin King has demonstrated that Sainsbury can grow again, even if that means any takeover would be at a higher price Robert Peston, BBC Business Editor href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/02/sainsbury_a_takeover_in_sight.html">Read Robert Peston's blog See Sainsbury's shares | |
| Sainsbury's has for some time been viewed as a potential takeover target for private equity firms. | Sainsbury's has for some time been viewed as a potential takeover target for private equity firms. |
| However, in a joint statement, CVC, Kohlberg Kravis Roberts and Blackstone said "no decision" had yet been made on the relative merits of an offer. | However, in a joint statement, CVC, Kohlberg Kravis Roberts and Blackstone said "no decision" had yet been made on the relative merits of an offer. |
| "There can be no assurance that any offer for Sainsbury will be forthcoming," the US-based private equity consortium said. | "There can be no assurance that any offer for Sainsbury will be forthcoming," the US-based private equity consortium said. |
| The three companies are some of the biggest private equity firms in the world. | The three companies are some of the biggest private equity firms in the world. |
| Sainsbury's declined to comment. | Sainsbury's declined to comment. |
| Possible targets | Possible targets |
| Takeover rumours were given added impetus on Thursday when the company said that the Sainsbury family trust had reduced its share holding to 13.9%. | Takeover rumours were given added impetus on Thursday when the company said that the Sainsbury family trust had reduced its share holding to 13.9%. |
| The Sainsbury family's stake in the company has been seen as a potential obstacle to any possible takeover. | The Sainsbury family's stake in the company has been seen as a potential obstacle to any possible takeover. |
| The bid talks also lifted shares in other UK supermarket groups. | The bid talks also lifted shares in other UK supermarket groups. |
| By mid-morning trade, Morrisons shares gained 7%, Tesco rose 5% and B&Q owner Kingfisher was lifted 4%. | By mid-morning trade, Morrisons shares gained 7%, Tesco rose 5% and B&Q owner Kingfisher was lifted 4%. |
| In early afternoon trading, Sainsbury's shares were up 15.6%, or 69.5 pence, at 514.75 pence. | In early afternoon trading, Sainsbury's shares were up 15.6%, or 69.5 pence, at 514.75 pence. |