Will Sainsbury's ring the changes?

Once in a while, something happens to remind you that all those windy clichés about the increasingly breakneck pace of commercial life - ‘Change is the only constant' being a particular favourite here at MT Towers - are only clichés because they contain more than a grain of truth. The Delta 2-backed bid for Sainsbury's is one of those things.

Last Updated: 06 Nov 2012

Only a few years ago it's would have been hard to imagine that the Prime Minister of Qatar - whose investment vehicle Delta Two is - would even have heard of the company, never mind would want to buy it so badly that he would be prepared to stump up £12bn for the privilege. After all, can he really be in the habit of popping over to the UK specially to stock up on Taste the Difference goodies? Although this being private equity, a whopping £8bn of the ticket price would be debt. A £12bn business for only £4bn cash up front, not bad, eh? [UPDATE 19/07: It emerged to day that the initial bid actually values the firm at a more modest £10.6bn, only £3bn of which would be in cash. Delta 2 may have to do a bit better than that to put the matter beyond doubt.]

But these days such bizarre shenanigans barely raise an eyebrow, so firmly focused are the eyes of most interested parties on what they can make out of it. Except for the Sainsbury family itself, which apparently is not at all keen on the deal. But they don't hold a controlling interest and so it is quite possible that the sale will go through anyway.

It's hardly any time at all since Sainsbury's defeated another private equity bid, led by CVC, and promptly revalued its property portfolio in an attempt to price the firm out of the market. But it hasn't worked - the Qataris have very deep pockets and it will be much harder for Sainsbury's to tell them to go away this time. The nation's second favourite supermarket may soon find itself in the hands of a very different family, indeed - the Qatari royal one.

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