Sainsbury's shares plummet as takeover bid shelved

by Staff, Brand Republic 05-Nov-07, 10:40

LONDON - Shares in supermarket group Sainsbury's fell almost 24% this morning as Qatari-backed investment fund Delta Two decided not to proceed with its £10.6bn bid.

Delta Two launched in July and said it was abandoning its bid because of turmoil in the global markets. Sainsbury's shares were down 23.8% this morning, a fall of 107.25p, and are currently trading at 447.25p, having closed at 555p on Friday.

The bid was not backed by members of the Sainsbury family, which controls an 18% stake in the business, and last month the family said that it would only support the deal if the Qatari-backed fund struck a deal with the group's pension fund trustees.

Sir Philip Hampton, chairman of Sainsbury's, said: "Sainsbury's has attractive future prospects and the recovery strategy commenced in 2004 is well advanced and continuing to deliver growth in the business. We have a first-class management team and colleagues to drive the business forward."

In a statement, Sainsbury's said its recovery plan was now well established and the company had delivered eleven consecutive quarters of like-for-like sales growth.

Last month, Sainsbury's reported its first-half sales performance was in line with expectations and is due to report its interim results next week.

Justin King, chief executive of Sainsbury's, said: "Interest in Sainsbury's has been borne out of the company's success to date in implementing its recovery strategy. We have remained focused on delivering great service to customers over recent weeks and months and have made significant progress towards making Sainsbury's great again. All colleagues can now continue to deliver towards the targets we have set."