Newspaper article The Evening Standard (London, England)

Delta Two Ups Sainsbury's Stake to 25%; MARKET ROUNDUP

Newspaper article The Evening Standard (London, England)

Delta Two Ups Sainsbury's Stake to 25%; MARKET ROUNDUP

Article excerpt

SAINSBURY'S was on red alert today after Qatari investment team Delta Two confirmed it has raised its stake in the supermarkets group to 25%.

Delta Two, which is run by Paul Taylor, a former business partner of property entrepreneur Robert Tchenguiz, bought 123 million shares at 595p each in a deal worth more than [pounds sterling]730 million.

It now seems certain Delta is intent on raising its holding in Sainsbury's to the maximum 29.9% allowed before it would be forced to make an all-out bid.

Delta Two is part of Three Delta, the investment vehicle headed by Sheikh Hamad bin Jassim bin Jabr al Thani, Qatar's prime minister, who also holds shares in Sainsbury's. The stock soared above 600p before settling up 30p at 595p a rise of more than 5% to value the company at almost [pounds sterling]11 billion.

Delta took a 17.4% stake in April, sparking speculation that it wanted to take over the company and/or force it to break up and sell off its valuable property portfolio. Talk in the City is that Taylor recently approached members of the Sainsbury family with an offer of 610p a share for their 18% holding.

He was knocked back by the family and appears to have scooped the 7% from US fund manager Brandes.

Rival supermarkets group Wm Morrisonwas up 9p at 30934p after a positive update from Numis. The shares have fallen 10% in just over a month, but there has since been a modest improvement in like-for-like sales. Numis analyst Steve Davies said: "We believe the shares represent an attractive investment opportunity at these levels."

The wider London market responded positively to the Sainsbury's news, and the FTSE 100 index was up 31.5 points at 6681.4. However, there were nerves in the City as traders andinvestors awaited US inflation data, a key indicator of whether interest rates will rise or fall across the Atlantic.

"Anything that offers further direction as to where the Fed will go next with monetary policy could result in a reaction on both sides of the Atlantic ahead of the close," said Adam Neal, a trader at CMC Markets. …

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