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Sainsbury's stock higher on hopes of interest from Morrisons loser

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By Reuters
Sainsbury's stock higher on hopes of interest from Morrisons loser
Sainsbury's stock higher on hopes of interest from Morrisons loser   -   Copyright  Thomson Reuters 2021

LONDON -Shares in British supermarket group Sainsbury’s rose as much as 3.7% on Monday on hopes SoftBank’s Fortress Investment, which lost out in the auction for Morrisons, may turn its attention to an even bigger player in UK grocery.

Sainsbury’s stock was up 4.2 pence at 288.9 pence at 0858 GMT, valuing the business at 6.7 billion pounds ($9.1 billion).

Fortress was defeated in Saturday’s shootout for Morrisons, Britain’s No. 4 supermarket group, bidding 286 pence a share – a penny less than rival Clayton, Dubilier & Rice.

However, managing partner Joshua A Pack signalled Fortress remained 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.

A spokesperson for Fortress declined to comment on Sainsbury’s, which trails only market leader Tesco in UK grocery sales.

A Sainsbury’s spokesperson also declined to comment.

Shares in Sainsbury’s are up 28% this year, buoyed by bid speculation.

That started in April when Czech billionaire Daniel Kretinsky raised his stake in Sainsbury’s to just under 10% and has been fuelled by the bid battle for Morrisons and signs CEO Simon Roberts’s “food first” strategy is starting to work.

($1 = 0.7381 pounds)