Shares in Sainsbury’s tumbled by 15p to 546p this morning, a 2.5 per cent drop, amid reports that Texas Pacific Group (TPG) has withdrawn from the CVC-led private equity consortium heading up a bidding war for the supermarket chain.
This would make TPG the second firm to pull out of the consortium, following the withdrawal of Kohlberg Kravis Roberts (KKR) last week in the face of opposition from the Sainsbury family, which owns around 18 per cent of the retailer.
The rumoured departure of TPG comes hot on the heels of yesterday’s buyout offer from the consortium of 582p a share. But the Sainsbury family is reportedly still holding out for an offer of at least 600p a share. The board signalled to the consortium that while the price was high enough, the deal was still undeliverable due to the position of Lord Sainsbury and other family members on price.
Other shareholders, including Robert Tchenguiz, who own around 5 per cent of the company, are also looking for a 600p a share offer, which values the company at £10.4 billion.
The board is expected to meet today to discuss the verbal offer, having already rejected a 562p-a-share indicative offer last week. Chairman Sir Philip Hampton will put the revised offer to the Sainsbury family members and other shareholders to see if they will soften their current stance.
The consortium has faced hostility from the trustees of Sainsbury’s pension scheme, who have warned that the £400 million deficit could swell to £3bn.
The private equity consortium now has until Friday, April 13, to make a formal bid under a Takeover Panel ruling, although TPG’s withdrawal could significantly reduce the chances of a successful proposal by this date.
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