The private equity group eyeing supermarket chain J. Sainsbury is offering sweeteners including an equity stake, as its £10-billion bid was rejected by the board, newspapers reported yesterday.
The group led by CVC Capital Partners has offered an equity stake of 25% in the company after Britain's third-largest supermarket chain rejected a 562-pence-a-share bid, according to the Times and the Daily Telegraph.
The consortium which also includes Blackstone and Texas Pacific Group, also pledged to invest £3bn into the business over five years and create 16,000 jobs by opening new stores, the papers said.
Sources familiar with the situation last week said that the private equity consortium submitted a bid on Thursday at about 560p, which was rejected.
David Sainsbury, the supermarket’s largest investor and owner of 8% of the company has reportedly said in private the deal must offer at least 600 pence a share to proceed. But the Times reported that the Sainsbury's board may consider offers above 580p.
The private equity group has been given until 13 April by the UK Takeover Panel to say publicly whether it is bidding for Sainsbury or not.
Sainsbury was not immediately available for comment. But it recently reported positive results from a recovery programme launched three years ago, which took its IT infrastructure back in-house and wrote off some IT system in addition to major marketing and store-front improvement drives.