J Sainsbury in sights of activist investor Crystal Amber, share raid planned
The activist investment fund Crystal Amber is planning to take a shareholding in the listed UK-based supermarket group J Sainsbury, The Sunday Telegraph reported. The newspaper said Crystal Amber is in discussions with several overseas investors regarding a plan to acquire a substantial shareholding in J Sainsbury, but did not cite a source for the claim.
Crystal Amber is understood to believe that a group of activist investors could either force J Sainsbury to make substantial property disposals or prompt a takeover bid for the supermarket operator, the item said. Crystal Amber’s main objective is to engineer a takeover bid for J Sainsbury, but as it lacks the financial resources to push for change, the activist fund is looking to persuade other similar investors to acquire stakes, the report added.
It is believed that a US investor approached Crystal Amber this year with a view to buying a shareholding in J Sainsbury, the article said. Following those discussions, Crystal Amber is thinking about buying a stake worth an eight-figure sum, the item continued, adding that the investment firm could make its move early next year.
Crystal Amber has put together an extensive dossier on strategic options to that J Sainsbury could consider. Sources cited by the newspaper said the dossier argues that, absent a takeover offer, the best option for J Sainsbury would be a sale and leaseback deal.
It is understood that Crystal Amber thinks J Sainsbury could return up to GBP 2.25bn (EUR 2.85bn) to shareholders if it was to cut its ownership of its close to GBP 12bn property estate from 61% to 51% and increase its net debt to GBP 2.7bn, the item said.
Crystal Amber confirmed that it had put together a dossier on J Sainsbury but refused to comment about whether it has bought or is thinking about buying shares in the supermarket group, according to the report.
As previously reported, the government of Qatar failed in a 600p per share bid approach for J Sainsbury in 2007 that valued the target at GBP 10.6bn. The Qatar government still holds a stake just short of 26% in J Sainsbury, the item said.
J Sainsbury’s share price closed 4.9p at 238.3p in London on Friday, 5 December, giving the company a market capitalisation of GBP 4.56bn.
Sunday Telegraph