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Qatar ups Sainsbury stake to 25% Qatar ups Sainsbury stake to 25%
(about 2 hours later)
The royal family of the Gulf kingdom of Qatar has upped its stake in supermarket J Sainsbury to above 25%.The royal family of the Gulf kingdom of Qatar has upped its stake in supermarket J Sainsbury to above 25%.
The family's investment vehicle, Delta Two, annouced it had bought 123 million Sainsbury's shares at 595 pence per share, making £732m in all.The family's investment vehicle, Delta Two, annouced it had bought 123 million Sainsbury's shares at 595 pence per share, making £732m in all.
The move takes the family stake to 435 million shares.The move takes the family stake to 435 million shares.
Sainsbury's was recently at the heart of a takeover battle, fighting off a £10.1bn ($19.9bn) offer from a private equity consortium in April.Sainsbury's was recently at the heart of a takeover battle, fighting off a £10.1bn ($19.9bn) offer from a private equity consortium in April.
The consortium led by CVC Partners dropped their 600 pence-a-share proposal after the founding Sainsbury family, which owns 18% of the firm, had opposed its plans.The consortium led by CVC Partners dropped their 600 pence-a-share proposal after the founding Sainsbury family, which owns 18% of the firm, had opposed its plans.
In early trading, Sainsbury's shares were up 4.3% to 589.5 pence.In early trading, Sainsbury's shares were up 4.3% to 589.5 pence.
In the UK, Sainsbury's has about 770 stores and employs about 155,000 people.In the UK, Sainsbury's has about 770 stores and employs about 155,000 people.
Two familiesTwo families
The Qatari royal family first unveiled its interest in Sainsbury's when in April Delta Two annouced it had bought 17.6% of the group.The Qatari royal family first unveiled its interest in Sainsbury's when in April Delta Two annouced it had bought 17.6% of the group.
The fresh purchase takes the Delta Two stake to 25.007%, well ahead of that held collectively by the Sainsbury family.The fresh purchase takes the Delta Two stake to 25.007%, well ahead of that held collectively by the Sainsbury family.
As well as the Qatari royal family, the Delta group of investment vehicles is linked to property entrepreneurs Robert and Vincent Tchenguiz. Delta is run by Paul Taylor, who was once chief of an investment vehicle of property magnate Robert Tchenguiz.
Robert Tchenguiz owns 5% of Sainsbury's and has called for it to be split up so as to realise the value of its property assets. Mr Tchenguiz also has a stake - of 5% - in Sainsbury's, and has made it clear he would like the group to split off its property assets to release value for its shareholders.
April's Qatari move caused analysts to speculate that a property deal was becoming more likely. Mr Taylor's past experience has led some analysts to suggest that Delta, too, might be looking for such a property deal.
But Sainsbury's itself has been at pains to distance itself from any spin-off off of its property, arguing that its value was closely tied to retail operations.But Sainsbury's itself has been at pains to distance itself from any spin-off off of its property, arguing that its value was closely tied to retail operations.
When in May it announced full-year profits of £380m, Sainsbury's said its property holdings were worth £8.6bn, 65% more than earlier estimates.When in May it announced full-year profits of £380m, Sainsbury's said its property holdings were worth £8.6bn, 65% more than earlier estimates.
And some observers agree. In a note to clients, ABN Amro said it did not think anyone - management or outside investors - could unlock value from property "without hindering the group's... recovery and competitive capability".And some observers agree. In a note to clients, ABN Amro said it did not think anyone - management or outside investors - could unlock value from property "without hindering the group's... recovery and competitive capability".