Newspaper article The Evening Standard (London, England)

Bid Hopefuls Keep It Steady at Sainsbury's

Newspaper article The Evening Standard (London, England)

Bid Hopefuls Keep It Steady at Sainsbury's

Article excerpt


PRIVATE EQUITY outfit Cinven's decision to abandon a rival bid for J Sainsbury has done little to dampen the enthusiasm of City speculators, with shares in the supermarket giant drifting just 312p to 505p.

Cinven had originally teamed-up with Texas Pacific Group and Bain Capital to make an offer. But the idea was scrapped after Texas Pacific threw in its hand with the rival CVC Capital Partners consortium, which also includes Blackstone and Kohlberg Kravis Roberts. They are thought to be close to offering 550p a share for Sainsbury, which would value the entire group at [pounds sterling]11 billion, including debt.

Cinven has decided going it alone on such a big deal and possibly being forced into a bid battle, would prove too costly. Some in the City have argued that the reluctance of other private-equity outfits to join the battle for control of Sainsbury would make it difficult for any CVC-led offer to succeed.

But brokers are not so sure. One commented: "The price is holding up reasonably well and there is no way they will allow it to drift back too far.

It is certainly underpinned at these levels".

Defence companies went on bid alert following reports that US rival Boeing and Lockheed Martin are looking for potential takeover targets. Word is they are focusing on companies worth in excess of [pounds sterling]5 billion, such as Meggitt, up 5p at 356p, Cobham, 314p better at 212p, and UltraElectronics, 23p higher at 1208p, in an attempt to win more work from the Ministry of Defence.

Reports claim they have already been rejected by Ultra, the battlefield IT specialist, which carries a price tag of more than [pounds sterling]800 million.

Share prices generally came off the boil as investors chose to lock-in some of this week's profits. In thin trading, the FTSE 100 index fell 12.5 to 6420.8, but remains just off its six-year high.

Amec continues to trade at a record high of 482p. Earlier this week, Scotland's Western Isles Council gave the go-ahead for the Lewis Wind Power consortium to build Europe's biggest onshore wind farm as part of Scotland's Western Isles wind farm project. …

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