The board Sainsbury’s will this week seek urgent clarification on the funding of the £10.4bn bid approach for the retailer by Two Delta, the Qatar-backed fund. The Observer. Sunday Telegraph. Sunday Times
Following last week’s turmoil in the credit markets, the retailer is increasingly concerned about the level and cost of the debt supporting the approach.
‘What the board doesn’t have a clear idea on is what the cost of debt will be. Everyone needs to be persuaded that the company will be able to afford to carry the levels of debt that the Qataris envisage,’ said a source.
Investors are already worried that the second attempted takeover of the supermarket chain this year could be thwarted by the founding family, which controls 18%. But it is understood some company directors share the concerns of its vocal members, Lords David and John Sainsbury, who argue details of the equity structure proposed remain sketchy, and the £6bn debt burden the retailer would be expected to carry is too high.