London January 27 2023: British convenience store operator Bestway Group Ltd. has bought a 3.45% stake in J Sainsbury Plc and said it may look to buy more in a move which will prompt speculation about the future of the UK grocer.
Bestway said Friday it intends to hold the shares for investment purposes but added that it’s not considering making an offer for Sainsbury, the UK’s second largest grocer. The purchase of shares is equivalent in value to about £193 million ($239 million) at Sainsbury’s closing price on Thursday.
Sainsbury stock rose more than 5% in early trading.
Bestway is one of the largest family-owned business in the UK with sales of about £4.5 billion. It started off as a convenience store group but now has a range of multinational interests across the wholesale grocery, pharmacy, real estate, cement and banking sectors, employing 28,000 people globally.
Some of Bestway’s best known convenience retail brands in the UK include the Costcutter and Bargain Booze chains. It’s also the largest independent wholesale operator in Britain and so is closely linked to the country’s grocery sector.
Takeover speculation has swirled around Sainsbury for some time as Britain’s supermarket industry becomes increasingly consolidated. Last year US private equity firm Clayton, Dubilier & Rice completed the highly leveraged takeover of Wm Morrison Supermarkets Plc.
Sainsbury’s shareholder base has also piqued interest too as it has two large investors including the Qatar Investment Authority and Czech billionaire Daniel Kretinsky’s Vesa Equity Investment.
Sainsbury recently reported a solid Christmas period although higher food and payroll costs are squeezing its margins as it tries to hold down prices for cash-strapped shoppers.
