Shares in Sainsbury’s have slumped this morning after news emerged of a sell-off by the group’s biggest shareholder, the Qatar Investment Authority.
Qatar’s sovereign wealth fund is selling stock in the supermarket worth £306m, reducing its holding by about 5%, according to a report by Reuters.
Regulatory filings revealed QIA offered almost 110 million shares at a price of 280p.
QIA, which is the biggest shareholder in the business, held a stake of around 14% in Sainsbury’s prior to the move.
The wealth fund first invested in Sainsbury’s in 2007 and at one point owned approximately a quarter of the group.
Shares, which were up by almost 12% over the past year, sank 4.6% to 274.9p as investors reacted to the news.
The stock had bounced back following a difficult period as CEO Simon Roberts’ food-first strategy gathered momentum, with Sainsbury’s taking market share from weaker rivals Asda and Morrisons.
Like Sainsbury’s, Tesco has also benefited from strong trading, with its shares up 22% so far in 2024.
AJ Bell investment analyst Dan Coatsworth said QIA might feel now was a good time to trim its stake in the supermarket given investor optimism in the sector was on the rise.
“The fact it managed to offload a large chunk of shares at only a 2.8% discount to last night’s closing price implies there was decent demand,” he said.
He added the sale followed a string of upbeat results and trading updates from Sainsbury’s and would suggest the investor saw “the supermarket now entering a new phase of its life”.
“That’s often the point at which an investor also reassesses their commitment to a stock, so selling down shouldn’t represent any concerns about the health of Sainsbury’s,” he added.
“However, the fact the stock has fallen below QIA’s placing price does suggest that some investors have been spooked by the news, wondering why the biggest shareholder is reducing its position at this point in time.”
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