Bestway Raises Stake In Sainsbury’s

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Just days after acquiring a 3.45% stake in Sainsbury’s, Bestway has caused further speculation as to its true intentions after upping its shareholding to 4.47%.

Last week, Bestway described its move as an investment and not a step towards making a takeover offer for Sainsbury’s. However, Bestway did say it may look to make further market purchases of Sainsbury’s shares, subject to availability and price.

It was later revealed that Dawood Pervez, the wholesaler’s Managing Director and son of the company’s founder, was advised to make a bid for Sainsbury’s less than a year ago.

Colin Graves, the founder of the Costcutter symbol group now owned by Bestway, said he had talked about a takeover offer for Sainsbury’s during a meeting with Pervez. He is quoted by The Telegraph as saying: “Bestway’s stakebuilding in Sainsbury’s did not come as a complete surprise to me.

“I had dinner with [Bestway Wholesale managing director] Dawood Pervez 10 months ago and he asked for advice on what to do with the wider Bestway business. His concerns were that the group needed pulling together rather than being fragmented as it is currently.

“I told him that the simplest answer would be to go out and to take Sainsbury’s private and combine the two groups. And it now looks like Bestway has taken my advice.”

Sainsbury’s declined to comment today beyond Friday’s statement that the group would engage with Bestway in line with its normal interactions with shareholders.

Meanwhile, a spokesperson for Bestway restated its position that the stake is for “investment purposes”.

There has been speculation that Bestway wants to use the stake as leverage to get Sainsbury’s to collaborate in wholesale areas or pharmacy retail. Bestway owns Well Pharmacy, the UK’s largest independent pharmacy chain.

Earlier this month, LloydsPharmacy said it was closing its 237 concessions in Sainsbury’s stores.

The shareholding makes Bestway Sainsbury’s sixth largest investor. It now has the right to make an offer with the agreement of Sainsbury’s or if another business puts a deal on the table.

Sainsbury’s has been subject to several takeover rumours in recent years after its plan to merge with Asda was blocked by competition regulators in 2019.

Qatar Investment Authority is currently a major shareholder in Sainsbury’s with more than a 14% share of the supermarket, with Czech billionaire Daniel Kretinsky’s Vesa Equity Investment holding a 10% stake.

NAM Implications:
  • The more you know, the less the risk.
  • Anticipate a bid…
  • …and all that goes with it…

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