Global Finance

Stock of Sainsbury’s surged in anticipation of interest from Morrisons’ loser

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Shares of British supermarket group Sainsbury’s jumped as much as 3.7 percent on Monday on speculation that SoftBank’s Fortress Investment, lost the bidding for Morrisons, may shift its focus to a larger player in UK grocery. At 0858 GMT, Sainsbury’s shares were up 4.2 pence to 288.9 pence, valuing the company at 6.7 billion pounds ($9.1 billion).

In the duel for Morrisons, Britain’s No. 4 grocery chain, Fortress was lost, asking 286 pence per share – a penny less than rival Clayton, Dubilier & Rice. Managing partner Joshua, A Pack, on the other hand, indicated that Fortress was still interested in UK assets. “The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value,” he said in a statement.

Sainsbury’s trails only market leader Tesco (OTC: TSCDY) in UK grocery sales, according to a Fortress representative. A spokesman for Sainsbury’s also declined to comment. Sainsbury’s stock has risen 28 percent this year as a result of bid rumours. This began in April, when Czech billionaire Daniel Kretinsky increased his position in Sainsbury’s to just under 10%, and has been fueled by the Morrisons bid war and hints that CEO Simon Roberts’ “food first” approach is beginning to bear fruit.