From day one, the£10.5 billion deal looked susceptible to derailment but, after donning their rose-tinted glasses, shareholders were happy to play down the prospect.
Despite uncertainties about the Sainsbury family’s stance and pension funding, the real shock came from an unexpected quarter. The idea that Delta Two, supported by Qatar’s oil-rich royal family, could come a cropper on deal finance looked the least likely cause to scupper the transaction.
After seemingly interminable talks, an end is in sight. By 5pm Thursday, the deadline set by The Takeover Panel, the question mark over Sainsbury’s future ownership will have been removed. The fall in Sainsbury’s share price to 550p at the start of this week, compared with the 600p level of the bid, showed how much shareholders had been shaken.
Sainsbury’s board members are reportedly annoyed by the last-minute hitch. No wonder. As the grocer gears up for the most important selling period of the year, the ownership limbo could be bad for business.
Sainsbury’s chairman Sir Philip Hampton and his team have done a good job of maintaining business as usual, but continuing uncertainty must eventually take its toll. Crucial issues, such as supplier terms and provision of cash to fund a likely price war, cannot be deferred forever.
As often happens, the market will reflect sentiment on the likelihood of a deal. Over the next few days, investors will watch the share price avidly and decide whether to stay in or sell up.
Musical chairs at Sports Direct
Two cheers for the new boys on Sports Direct’s board.
Last week’s revelation by Retail Week Online that independent non-executive Chris Bulmer was to quit was followed by a regulatory announcement detailing two appointments.
Property baron Malcolm Dalgleish and former Reebok man Dave Singleton are both highly regarded. However, it’s no disrespect to either to observe that they are not the City big-hitters investors have demanded.
The word has been put out that the pair have made clear to founder Mike Ashley that he must put his house in order. That’s welcome news. The third cheer will come when there’s evidence of their success.
George MacDonald is deputy editor of Retail Week
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