Sainbury's in fresh takeover rumours

City rumours are once again circulating over a potential takeover bid for Sainsbury’s. Dealers are speculating that the Qatar Investment Authority, the investment vehicle of the Qatar Royal Family, is about to increase its share stake in Sainsbury from 27.3% to 29.9%.

Above this level a full bid would have to be launched to comply with the City’s Takeover Code. The Authority has just sold 35m Barclay shares so it has got the buying power to scoop up more of Sainsbury shares.

The Qataris ended a £10.6bn, or 600p per share, cash bid for Sainsbury’s in November 2007 due to the crumbling credit markets and the beginning of the global credit crunch. The Sainsbury family now has a combined shareholding of 15%.

Meanwhile Sainsbury is recovering fast, consolidating its place as the UK’s third largest supermarket chain. Latest fourth quarter figures were better than expected and showed a 6.2% leap in like for like sales.

It reckons it is taking market share from Waitrose and Marks & Spencer. Another rumour going the rounds is that Sainsbury may pre-empt a fresh bid from Qatar by merging with Marks & Spencer.