A touch of Qatar

Just when we thought a year might pass without talk of a bid for Sainsbury’s, the Qataris are back in business.

The Gulf state’s sovereign wealth fund had to pull out of its bid a couple of years ago when the credit crunch meant it couldn’t afford to proceed, but this week’s sale of a big stake in Barclays means they’ve got money in the bank again and the rumours have resurfaced.

In 2007 the Qatari interest was a big distraction to Sainsbury’s, and while the collapse of the bid deprived chief executive Justin King of a big payday, in the intervening two years he has been able to concentrate on reviving the brand and has met with considerable success.

The current talk doesn’t seem to have a huge amount to it, as tthe facts seem to point against a new bid.

The Sainsbury family were unwilling to support a bid in 2007 that was at a higher level than one would be today, while the Qataris didn’t take part in the recent fundraising by the company which in fact ended up diluting their stake.

What’s crucial is that if the bid speculation does gather some traction, it can’t be allowed to divert management from the task in hand.

Sainsbury’s was expected to suffer in the downturn but in fact has prospered with a powerful twin message on price and product quality.

But more recently there have been suggestions Tesco is making up some of the ground it has lost in market share, and the number one retailer certainly seems to have a bit more wind in its sails than it has for some time. King and his team will want to avoid any unnecessary distractions.