The property entrepreneur may well have started the week expecting that he was about to make a killing on his big investment in Sainsbury’s. But by the end of Monday the Qatari-backed fund Delta Two had withdrawn its bid, causing the share price to plummet and wiping nearly £200m off the value of Tchenguiz’s 10% stake.
And that wasn’t the end of his troubles. Since he’d borrowed heavily to buy up the Sainsbury’s stock, investors started worrying that this big loss would force him into a fire sale of his other holdings to raise cash. So they also started selling out of his two other biggest investments, Mitchells & Butlers and SCi Entertainment, taking his total loss well above the £200m mark. Now that’s what you call a bad day at the office.
The man whose family name is a tribute to legendary Mongol conqueror Genghis Khan has previously cut a swathe through the UK business world, building up a multi-billion pound property empire and a pretty fearsome reputation to boot (click here to read MT’s interview with the man himself in January).
But the recent credit strife has made his life more difficult. With property prices rising and interest rates stable, he could afford to borrow heavily to buy his pubs and shops. Since August he’s already had to abandon a proposed joint venture with M&B, which would also have left him seriously out of pocket. Now Sainsbury’s has given him another headache.
Still, he won’t be giving up yet. Reports have suggested that he will be pressing the Sainsbury board to try and extract some more value from its huge property portfolio. And one thing’s for sure – he may spend his summers on a yacht in the Med, but he won’t be in a hurry to bow out of the UK. ‘I love it here,’ he told MT in January. ‘The UK has the finest and most advanced financial market in the world.’
Let’s hope he can navigate his way out of these choppy waters...