An investment fund backed by the Qatar government today confirmed that it had taken a large stake in supermarket group Sainsbury’s.
Delta Two said it had 17.4% of Sainsbury’s after buying 302m shares yesterday. Together with the interest of 300,000 shares in the company held by Sheikh Hamad Bin Jassim Bin Jaber Al Thani, who is deemed to be acting together with Delta Two, Delta Two owns 302.3m shares, equating to a 17.4%.
Delta Two is thought to be managed by Three Delta, a $20bn (£10bn) investment fund, run by Paul Taylor, the former chief executive of the Tchenguiz brothers’ Rotch Property Group. Its largest investors are the Qatar Government and Sheikh Hamad, the foreign minister and first deputy prime minister of Qatar.
Sainsbury shares surged nearly 8% to a new high on Wednesday when news of the share trade hit the market. The shares were flat today at 567p.
Robert Tchenguiz, with a 5.1% stake in Sainsbury’s, has already said he wants the group to release more value to investors from its property portfolio.
Sainsbury’s escaped a £10.1bn private equity bid by CVC Capital Partners earlier this month pitched at 582 pence a share, following opposition from the company's founding family, which owns a stake of about 18%.
While some traders in the market suggested the share raid could lead to another tilt for Sainsbury, analysts thought it was a property play.
Pali International analyst Nick Bubb said the share buying was ‘just a strategic investment in a trophy asset’. He expects Delta Two and Tchenguiz to ‘work together to press for management action and together they represent around 22%, a bigger block than the (Sainsbury) family shareholding’.
Seymour Pierce said: ‘This is not a prelude to a bid, but a lever to force the board to split the company into propco and opco, which is what Tchenguiz appears to be suggesting’.
Exane BNP Paribas analyst Tim Attenborough agreed. He said he believed the Qataris did not aim to launch a bid for Sainsbury but would use their stake as a lever to force it to release value from its property. ‘This increases the likelihood there will be a property-related deal,’ he said.