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Costcutter owner Bestway Group has announced this morning it has taken a 3.45% stake in Sainsbury’s and may buy further shares in the supermarket.
The wholesaler has purchased 80,792,512 shares in Sainsbury’s, which represents an investment of around £193m.
The group, which is a diversified multinational family-owned business across wholesale, pharmacy, real estate, cement and banking with turnover in excess of £4.2bn, does not intend to make a takeover offer for Sainsbury’s.
It intends to hold its shares in Sainsbury’s for investment purposes and “looks forward to supporting the executive management team”.
However, it said it would look to make further market purchases of Sainsbury’s shares from time to time, subject to availability and price, and invited institutional investors interesting in selling shares to contact the group.
As Bestway said no takeover offer will be made, it is prohibited from announcing an offer for Sainsbury’s (and from taking certain other actions) for a period of six months.
In a short statement, Sainsbury’s said: “We note the announcement made this morning by Bestway Group stating that it is not considering an offer for the company.
“We will engage with Bestway Group in line with our normal interactions with shareholders.”
Sainsbury’s shares have jumped 5.2% on the news to 251.8p.
Morning update
Ingredients manufacturer Treatt has made a “good” start to its financial year, it has stated ahead of its AGM later this morning.
Trading for the period to 31 December has been in line with management expectations, with Q1 sales 9% ahead of the prior year (3% at constant currency).
The group has seen particularly encouraging progress in citrus, where margins have improved across several key value-added products, driven by the execution of its procurement and pricing strategies.
It continues to implement strong cost discipline, and foreign exchange impacts were successfully managed by its revised hedging and currency management strategy.
The vast majority of UK production has now transitioned to its new UK facility, and UK production capacity will at least double once the process is fully completed, currently anticipated in the autumn.
It stated: “The group is well invested to fulfil its medium-term growth ambitions, with a good pipeline of opportunities in new and existing customer partnerships, including in coffee.
“The Board therefore looks forward to the remainder of this financial year and beyond with confidence.”
On the markets this morning, the FTSE 100 has edged up 0.1% to 7,768pts.
Along with Sainsbury’s, risers include Greencore, up 2.2% to 75.5p, Wynnstay, up 2.1% to 563.6p and WH Smith, up 1.6% to 1,589p.
Fallers include Naked Wines, down 2.8% to 133p, Virgin Wines, down 2.5% to 54.6p and Kerry Group, down 0.9% to €86.38.
Yesterday in the City
The FTSE 100 closed up 0.2% yesterday to 7,761.1pts, but there were a number of notable consumer fallers after gloomy market updates.
Diageo was down 5.5% to 3,472p despite posting strong sales and profits growth in the first half as investors reacted to a sharp slowdown in US growth.
Fever-Tree dropped 8.8% to 1,019p after warning of the ongoing impact of soaring costs, while Greencore lost 3.3% to 73.9p after seeing a slowdown in food-to-go sales amid train strikes.
Other fallers included Glanbia, down 4% to €11.19, Ocado, down 2% to 683p, WH Smith, down 1.9% to 1,564p, Premier Foods, down 1.6% to 1110.6p and SSP Group, down 1.4% to 259.6p.
Risers included Tate & Lyle, which posted strong recent growth in its core ‘food & beverage solutions’ business, up 6.1% to 767.4p.
Other risers included Naked Wines, up 5.2% to 126.8p, Just Eat Takeaway.com, up 3.3% to 2,033.5p, Deliveroo, up 3.1% to 91.4p and B&M European Value Retail, up 1.6% to 444.2p.
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