Delta Two, the Qatar-backed fund looking to take the supermarket chain private, has got until next Thursday to submit a bid, after the Takeover Panel issued a ‘put up or shut up’ deadline. The problem is that it needs to find another £500m from somewhere to finance its offer, and barring any fortunate discoveries down the back of the sofa, that means it needs more money from its Qatari sponsors.
A few months ago, Delta Two would have had banks queuing up to lend it the extra £500m. But since they’ve had their fingers burned by the credit crunch, the blank cheques have been a lot less forthcoming. Now Delta Two needs to load more equity into its bid to have any hope of persuading the Sainsbury family to approve the deal.
Indeed, it’s been a pretty awful time to launch the UK’s biggest ever retail take-private. Not only have the global credit markets virtually ground to a halt, the retail sector has also nose-dived – even the biggest chains have taken a hammering thanks to the terrible UK weather.