The CVC-led consortium has pulled out of Sainsbury's bid

CVC Capital Partners, Blackstone and Texas Pacific Group have pulled out of the process following an obstruction from 7% shareholder Lord Sainsbury, who encouraged the board not to recommend an offer of less than 600p a share.

The consortium announced on 2 February that it was in the preliminary stages of assessing Sainsbury’s and it made a number of proposals to the board over the last month. But its latest bid of 582p a share was viewed as undervaluing the company and the bid collapsed today.

A statement this afternoon from Sainsbury’s said: ‘The consortium made a number of proposals to the Board, all of which were subject to certain pre-conditions. The key pre-conditions were outside the control of the board and related to the consortium’s proposed financing structure.

'The Board explored with the consortium whether the key pre-conditions attached to the proposals were capable of being satisfied or could be revised, but the consortium concluded that this was not possible. As a result, the consortium decided to cease discussions.’

It added: ‘The company is delivering an improving performance with a strong management team and its recovery is already well established. This has been further demonstrated in the recent trading update for the 12 weeks to 24 March 2007 where like-for-like sales, excluding fuel, were up 5.9%.’

Sainsbury’s shares are currently trading at 521p a share.