£10.1bn takeover of Sainsbury's abandoned
Private equity firm CVC has abandoned plans for a £10.1bn (€14.9bn) offer for supermarket giant Sainsbury's.
The end of its interest in the UK's third largest food retailer comes after its proposed offer price reportedly failed to win over the Sainsbury family, which holds an 18% stake in the business.
CVC said: "After a number of discussions between the board of Sainsbury and the consortium, it became clear that the consortium would be unable to make a proposal that would result in a successful offer."
The news comes just over two months after the CVC-led consortium first admitted it was considering an offer for the business. It proposed 582p a share, equivalent to £10.1bn (€14.9bn), but it is thought that the Sainsbury family believed the business was worth at least 600p a share.
CVC's partners in the bid, Blackstone and Texas Pacific, pulled out of the deal this week, while a fourth, Kohlberg Kravis Roberts, withdrew last week.
CVC said its plans for the supermarket giant included major investment and a job-creating business plan, wide employee ownership and proposals for the "continued security" of the company's pension scheme. It described the talks with Sainsbury's as "friendly and constructive" and said it remained a "great admirer" of the business.
The company's share price fell more than 3% on news of the collapse of the potential deal. CVC's consortium was unable to resolve talks with the company's pension trustees over a potential £3bn (€4.4bn) deficit.
The family's resistance to the deal and its 18% stake were also instrumental in the abandonment of the deal. CVC's consortium needed 75% acceptances from shareholders to allow it to shift the debt needed to fund the deal on to the operating company.
Sainsbury's said: "The key preconditions were outside the control of the board and related to the consortium's proposed financing structure."
The members of the consortium, which had until Friday to table a formal bid under Takeover Panel rules, are now barred from making another approach to the firm for the next six months unless there is a recommendation from the board or another bidder enters the fray for the chain.
