Qatari foreign minister bets on bid for Sainsbury's

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The Independent Online

A member of the Qatari ruling family has taken a £90m bet on J Sainsbury's being taken over for up to £10bn by a private equity-backed consortium in the latest sign that petrodollars are pouring into London.

Sheikh Hamad bin Jassim bin Jaber Al Thani, the Gulf state's first deputy prime minister and its foreign minister, has the equivalent of a 1 per cent stake in Sainsbury's via derivatives contracts, he disclosed yesterday.

His move on Sainsbury's came as it emerged that Texas Pacific Group (TPG), the US private equity group, is likely to team up with the existing bid consortium rather than mount a rival bid. TPG is preparing to join the trio of Kohlberg Kravis Roberts, CVC and Blackstone, which is working on a bid that analysts believe could be worth up to 550p per share. Shares in the group yesterday rose 6.5p to 516p.

Sheikh Hamad's investment vehicle, Delta Commercial Property (DCP), is backed by the Qatari Investment Authority, which emerged as a major player in the red-hot London mergers and acquisitions market last year when it tried to buy Thames Water.

DCP is controlled by Paul Taylor, the former right-hand man of the Tchenguiz property tycoons who launched a private equity fund called Three Delta with backing from the Gulf state's foreign investment arm to snap up asset-backed companies.

Three Delta, which has an illustrious board including the ex-Barclays Bank chairman Sir Peter Middleton, recently paid £1.4bn for Britain's second-largest nursing homes chain, Four Seasons. It is known to have access to several billions of pounds and a stated mission to focus on "direct real estate opportunities".

Mr Taylor declined to comment yesterday on his plans for Sainsbury's, which analysts estimate has £7.5bn of property. A spokesman for Three Delta, which has offices in London's Mayfair, also refused to comment. Sheikh Hamad bought 300,000 shares outright and has options to purchase nearly 17 million more for 511p a pop.

Separately it emerged that UBS, the investment bank, had placed 15.6 million Sainsbury's shares at 511p, raising around £80m. The identity of the seller was not disclosed but regulatory filings have revealed that most of Sainsbury's biggest investors have taken advantage of the soaring share price to offload some of their shares.

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