Sainsbury’s supermarket chain has risen amid speculation that the retailer could be the next to be acquired by overseas investors.
The company was the top riser on the FTSE 100 on Monday (Oct. 4), with traders assuming it could be the next takeover target.
Rival chain Morrisons was most recently the subject of a protracted takeover battle that was won last weekend by the US private equity firm Clayton, Dubilier & Rice (CD&R).
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Who would like to buy Sainsbury’s?
Fortress Investment Group, a private equity firm backed by Japanese financial institution Softbank, is reportedly interested in buying out Sainsbury’s.
It lost to CD&R in the bidding process for Morrisons, with Fortress bidding 286 pence per share, as opposed to CD & R’s 287 pence per share.
Fortress has signaled that it remains interested in acquiring UK businesses. Another American group, Apollo, is also said to be in the running after making an unsuccessful bid for Asda last year.
A combination of low interest rates and a relatively weak pound is one of the factors that make UK firms more attractive to foreign buyers.
How much is Sainsbury’s worth?
Sainsbury’s is reportedly valued at around £ 7 billion. This would be similar to Morrisons and Asda, which were sold to the Issa brothers for £ 6.8 billion last year.
The company fought with Asda for the status of the second largest UK supermarket chain. It has nearly 112,000 employees and more than 1,400 branches.
Will Sainsbury’s be taken over?
Fortress said it continues to look for investment opportunities in the UK and investors seem to think Sainsbury’s is a store on their shopping list.
“The UK remains a very attractive place to invest in in many ways and we will continue to explore ways to help strong management teams grow their businesses and create long-term value,” said Joshua Pack, a Fortress financier.
However, Fortress is also rumored to be considering applying Tesco, the market leader. Tesco’s shares also rose on Monday as takeover speculation increased.
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