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Bid talk lifts Sainsbury's shares Bid talk lifts Sainsbury's shares
(about 2 hours later)
Shares in Sainsbury's have risen by as much as 18% after private equity investors said they were considering a takeover bid for the supermarket chain.Shares in Sainsbury's have risen by as much as 18% after 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 as high as 526.5 pence, valuing the firm at about £9.7bn ($19bn).The speculation pushed Sainsbury's shares as high as 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.
In late afternoon trading, Sainsbury's shares stood at 509 pence - almost 14.5% up on the day. Sainsbury's shares closed up 61.75 pence at 507 pence - almost 13.8% up on the day.
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 Read Robert Peston's blog See Sainsbury's sharesJustin 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 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 said it had not received a bid proposal from the private equity group.Sainsbury's said it had not received a bid proposal from the private equity group.
"No proposal has been received. Accordingly Sainsbury's has no further comment to make," the company added."No proposal has been received. Accordingly Sainsbury's has no further comment to make," the company added.
Possible targetsPossible 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%. Morrisons shares gained 7% while Marks and Spencer and Tesco rose 4.1% and 3.6% respectively.