Confidence in the private equity bid for Sainsbury's appears to be falling, as a hedge fund has cut its stake.

A top-ten investor confirmed yesterday it had sold a major part of its holding in the supermarket group, The Scotsman reported.

This was seen as evidence that the bid, linked to the Qatari royal family, would not be able to secure the necessary financing amid the credit market meltdown. Delta Two, the Qatar investment firm, has proposed a £10.6 billion bid for Sainsbury's, worth 600p per share.

Hedge fund Lansdowne Partners confirmed it had sold more than eight million shares in Sainsbury's, at an average price of 533p a share, well below the current bid level.

Topics