Qatar to build Sainsbury’s stake

Qatar’s state investment fund is looking to build its own strategic stake in Sainsbury’s, and is not in talks with Marks & Spencer for a joint bid, as was reported at the weekend.

Three Delta and Delta Two, funds backed by the Qatari government, are seeking to build a stake in the UK’s second biggest supermarket chain.

The Sheikh of Qatar said in a statement that Sainsbury’s was a strategic investment and that the fund’s preference was “to invest in a core business for the long term”.

Weekend newspapers reported that the Qatar investment fund was in talks with the head of Marks & Spencer for a joint bid.

Delta Two, a subsidiary of a commercial property vehicle controlled by the Sheikh of Qatar and the state’s government-backed private equity operation, recently increased its stake in Sainsbury’s to about one percent.

Qatar’s state investment fund is thought to have about $40 billion (£20.5 billion, €30.5 billion) under management. It bid in 2006 for Thames Water but was trumped by Australia’s Macquarie Bank.

The consortium of buyout firms already eyeing Sainsbury’s, which includes Blackstone Group, CVC Capital Partners, Kohlberg Kravis Roberts and Texas Pacific Group, is thought to be putting together a 550p per share offer.