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KKR pulls out of Sainsbury's bid | KKR pulls out of Sainsbury's bid |
(10 minutes later) | |
Private equity firm Kohlberg Kravis Roberts (KKR) has pulled out of the consortium interested in bidding for supermarket group Sainsbury's. | |
The group, which has been given until April 13 to make an offer by the UK's takeover watchdog, now includes CVC, Blackstone and Texas Pacific. | |
KKR's decision to withdraw came after "careful consideration," it said. | KKR's decision to withdraw came after "careful consideration," it said. |
The private equity firm has also launched a £10bn bid for the UK's larget pharmacy firm, Alliance Boots. | The private equity firm has also launched a £10bn bid for the UK's larget pharmacy firm, Alliance Boots. |
Offer | Offer |
The market is expecting between 550 pence to 600 pence per share in a bid for Sainsbury's, with an offer of some £9.5bn sitting at the lower end of the spectrum. | The market is expecting between 550 pence to 600 pence per share in a bid for Sainsbury's, with an offer of some £9.5bn sitting at the lower end of the spectrum. |
"If it comes in at 550 pence, I wouldn't expect it to be a knockout offer. Given the share price rise, it's a bit lower than people were looking for," said Andrew Wade or Seymour Pierce . | "If it comes in at 550 pence, I wouldn't expect it to be a knockout offer. Given the share price rise, it's a bit lower than people were looking for," said Andrew Wade or Seymour Pierce . |
Any offer also needs the acceptance of the firm's pension trustees. | Any offer also needs the acceptance of the firm's pension trustees. |
They want to know that the consortium will be able to fill a large pension gap. The deficit in Sainsbury¿s pension fund reached £276m as of October last year. | |
While shares in the supermarket ended the day flat at 561.5p, they have been rising recently. | While shares in the supermarket ended the day flat at 561.5p, they have been rising recently. |
They have gained some 30% in value since the consortium was told it had to make a bid by April 13 or withdraw its plans earlier in the week. | They have gained some 30% in value since the consortium was told it had to make a bid by April 13 or withdraw its plans earlier in the week. |
The Takeover Panel issued the deadline after a plea from Sainsbury's advisers. | The Takeover Panel issued the deadline after a plea from Sainsbury's advisers. |
The latest development comes after Sainsbury's saw strong like-for-like sales in the first three months of 2007, up by nearly 6%. | The latest development comes after Sainsbury's saw strong like-for-like sales in the first three months of 2007, up by nearly 6%. |
Given such good results, analysts say it might be hard to persuade shareholders of the need or attraction of being acquired by a private equity group. | Given such good results, analysts say it might be hard to persuade shareholders of the need or attraction of being acquired by a private equity group. |