Sainsbury books open to Delta Two

Source: Exec Digital UK

Date :20/09/2007 09:27:40

J Sainsbury and Qatar-based investment firm Delta Two have announced the start of a due diligence process

Delta Two and Sainsbury's are today jointly providing an update on their discussions concerning the possibility of Delta Two making an offer to acquire all of the issued and to be issued ordinary share capital of Sainsbury's which it does not already own, at a price of 600 pence in cash per ordinary share. Delta Two already owns 25 percent of Sainsbury shares.

In their joint announcement the companies said: “Following extensive discussions between the parties concerning the key aspects of Delta Two's proposal and, following the submission of a revised proposal by Delta Two, the Board of Sainsbury's has unanimously agreed that Delta Two may undertake a limited period of confirmatory due diligence on the Company in order to progress its proposal. There can, however, be no certainty that any offer for Sainsbury's will be made.”

Nevertheless Sainsbury's chairman Sir Philip Hampton has said he believes that if a firm offer does materialise, it would be recommendable to shareholders.

Tony Campbell, former Deputy Chief Executive of ASDA Group, would become non-executive Chairman of Sainsbury’s following completion of any offer by Delta Two.

Delta Two's business plan is focused on growth, envisaging £3.5 billion of capital investment over the next five years to fund new store expansion, the continued refurbishment of existing stores, further development of Sainsbury's non-food offering and continued investment in infrastructure.

Delta Two has provided assurances that Sainsbury's will have operational flexibility to compete in order to maintain and enhance customer goodwill, the announcement continued.

20 September 2007