Sainsbury (j) Share Discussion Threads

[m_kerr] 29/8/2021 18:05

even after this pullback, the shares are up about 40% year to date, so the takeover premium and morrisons read across has been factored in really. private equity are all about assessing risk, at this price the returns are modest, even with 70% leverage. morrisons was a straightforward one, with 86% property ownership and temporarily higher debt than normal which would have unwound in the year ahead. the fact two big rivals will now be in private equity hands, with very significant debts to service, should mean less intense price competition, albeit the sector is still cut throat.

[tim 3] 29/8/2021 16:10

Bet there's some shorts seriously sore here!

[leadersoffice] 29/8/2021 15:44

Tesco and Sainsbury's must fight for their futureThey need to show they can grow again or they will be easy targets for whoever wants to take them out Matthew Lynn 29 AUGUST 2021 • 11:00 AMIt might be next month, or it might be the month afterwards – but there can no longer be any question that Morrisons will soon be sold off to one of a surprisingly long queue of bidders. ArchiveReader PrintsBranded ContentSyndicationGuidelinesPrivacyTerms and ConditionsAdvertising termsFantasy SportUK Voucher CodesUS CouponsModern Slavery© Telegraph Media Group Limited 2021Update Consent

[leadersoffice] 28/8/2021 16:24

Sainsbury in Talks to Sell Banking Unit to Centerbridge: Sky https://www.bloomberg.com/news/articles/2021-08-28/sainsbury-in-talks-to-sell-banking-unit-to-centerbridge-sky

[quepassa] 27/8/2021 18:24

Major reductions in short positions - and still more than 3.5% to go.

Sainsbury looking increasingly like a takeover candidate against the bidding furore by multiple parties in the battle for Morrisons.

ALL IMO. DYOR.
QP

[dipa11] 27/8/2021 17:17

Once again Shorting reduced to 3.58% today One step towards the reduction of short Good luck to long time holder

[dipa11] 27/8/2021 12:51

Now a days shorting reduction is most likely since last 3 days price Is reduce and shorter took advantage of that.
If the share come back to Highest Level when shorting will closed and bid will come
As per paper news the SHARE was jump it was a desperate reaction of shorter
So hold tight LONG time Invester good luck

[ny boy] 27/8/2021 09:47

I like pull backs as I am a long term investor, they create attractive entry points. Dyor as usual

[anhar] 27/8/2021 09:45

JEFFERIES RAISES TESCO PRICE TARGET TO 330 (310) PENCE - 'BUY'

Sounds like a sell signal to me, were I to pay the slightest attention to broker bull, which I never do. In any case I thought this was the SBRY board, not TSCO,

[leadersoffice] 26/8/2021 12:04

JEFFERIES RAISES TESCO PRICE TARGET TO 330 (310) PENCE - 'BUY'

[anhar] 26/8/2021 09:05

loganair: ...Sainsbury’s is seen as a particularly attractive target...

By whom? False bid rumour spreaders? Just because there is a bid for Morrisons, it does not follow that there will be a bid for SBRY. There may be, and as quite a large investor I hope so, but all this hot air from those claiming to know something is laughable. Seen it all before so many times but some don't seem to appreciate that about 100.1% of bid rumours never materialise into actual bids.

For this reason it is a mug's game to buy on a price spiked by a bid rumour, hoping for a quick gain. Most times, the price will fall back as no bid emerges so if you do that too often, the losses won't be covered by those very isolated cases where it does happen.

[albert3591] 25/8/2021 18:58

Tesco will be pumped next.

[m_kerr] 25/8/2021 18:12

with the minimum premium for a takeover at about 20%, this would put a potential bid price at £8.7bn. given net debt of £640m, an enterprise value of £9.3bn excluding leases. expected underlying PBT of about £600m, with the typical 70% leverage that PE use, means interest of about £250m a year. so a leveraged pre tax return of 12.5%, which is about half what private equity typically want at a minimum. the property portfolio is worth about £11bn, but without the rental shield, sainsbury's is effectively a breakeven business.

[dipa11] 25/8/2021 17:25

Correction Once again Shorting reduced to 4.19% today One step towards the reduction of short Good luck to long time holder

[dipa11] 25/8/2021 17:20

Once again Shorting reduced to 4.6% today One step towards the reduction of short Good luck to long time holder

[spob] 25/8/2021 14:16

"Sainsbury’s is seen as a particularly attractive target due to its extensive property portfolio in the southeast of England."

Shame it no longer owns most of it. LOl

[loganair] 25/8/2021 13:06

Hedge fund short sellers rocked by Sainsbury’s share price surge amid Apollo takeover talk:


Hedge funds betting against Sainsbury’s have been left counting the cost of their negative wagers this week after the FTSE 100-listed supermarket giant saw its share price rocket on the back of fresh takeover rumours.

BlackRock Investment Management, Marshall Wace, and the Pelham Long/Short Master Fund are among the high-profile hedge funds positioned short against the UK supermarket giant, according to regulatory disclosures made to the UK Financial Conduct Authority.

The UK’s second-largest grocery chain initially saw its share price rocket by some 15 per cent on Monday following weekend media reports that US private equity firm Apollo Global Management was preparing a potential GBP7 billion (USD9.6 billion) swoop for the retailer.

Though Sainsbury’s value has since pegged back slightly, it remains up more than 10 per cent this week. Wednesday’s 321p is approaching a near-three year high for the retailer, which only last month was found to be the second most-shorted company among London-listed stocks, according to GraniteShares data.

FCA disclosures show BlackRock has a 2.02 per cent net short position, Pelham is sized at 1.28 per cent net short, while Marshall Wace is 0.65 per cent. In the past, well-known brand name hedge funds including Citadel, AHL, and GLG Partners held bearish bets against the company.

Earlier this summer, short sellers took a hit after the company surged on the back of surprisingly strong Q1 sales numbers, which prompted it to revise its profit outlook upwards.

New York-based Apollo – which is also understood to be eyeing a consortium bid for rival retailer Morrison’s alongside Fortress Investment Group – is one of several PE giants said to be weighing up a bid for Sainsbury’s.

Along with Tesco and Asda, Sainsbury’s and Morrisons comprise the UK’s ‘Big Four’ supermarkets that dominate the grocery sector. Sainsbury’s is seen as a particularly attractive target due to its extensive property portfolio in the southeast of England.

[arja] 25/8/2021 09:56

danvandan,
thanks for interesting comments and much appreciated as I had not followed SBRY closely. I only trade nowadays and this one might present an opp at times . My trigger finger was not quick enough to buy VMUK at opening dam it as I was almost certain it would hit 208 level at least after VUK in OZ took off on wednesday . thanks again sport .

[keyno] 25/8/2021 09:53

Nothing like a bit of insider info at any time of year.

[spob] 25/8/2021 09:29

Easy to manipulate share prices in August

[keyno] 25/8/2021 09:01

I can't help wondering if any of the inkies at The Times have been singing the late, lamented Sbry's CEO Mike Coupe's Ratner moment anthem "We're in the Money" this week? How many are still holding?

[danvandan] 25/8/2021 08:43

Agreed arja. The spike on Monday was caused by the hedge funds reducing shorts by 1.2% because they shat themselves over the weekend press hype about Apollo. A short squeeze, pure and simple, as I said at the time. Now that they've had time to reflect, they're holding firm. The market still doesn't like sbry. The apollo suggested price of £7bn is already reflected in the current share price and the fizz has subsided. The morrisons bid is now in doubt due to the pensions obligations. If it fails, there will be a big pull-back here. Today, I think sbry will drop 3-4% depending a little on the wider market, maybe as far as 305p.

[arja] 25/8/2021 08:16

quite a pullback in SBRY and I wonder if it will gradually fall back to about 305 chart support level .

[spob] 25/8/2021 05:56

Trustees warn Morrisons takeover would ‘materially weaken’ pension schemes

Concern over level of debt involved with rival bids from CD&R and Fortress


Jonathan Eley and Josephine Cumbo August 24 2021

The trustees of Morrisons’ pension funds have warned that either of the takeover bids for the supermarket chain would “materially weaken” its retirement schemes.

Private equity firm Clayton, Dubilier and Rice and a rival consortium led by Fortress Investment Group have pledged to safeguard the retirement benefits of staff in the two defined-benefit schemes that Morrisons sponsors.

But trustees are concerned about the elevated levels of indebtedness that both proposals would entail and raised the prospect of regulatory intervention.

“An offer for Morrisons structured along the lines of the current offers would, if successful, materially weaken the existing sponsor covenant supporting the pension schemes, unless appropriate additional support for the schemes is provided,” said chair of trustees Steve Southern.

The trustees are concerned that either acquisition would increase the company’s finance costs, potentially reducing the scope for company contributions to the schemes, and that senior debt may also rank ahead of the pension funds in any insolvency.

At the end of its financial year in January, Morrisons had net debt of £3.2bn. But the CD&R offer for the group envisages an equity contribution of about £3.4bn, with the remainder of the £10.2bn total price tag financed by debt.

“We hope agreement can be reached as soon as possible on an additional security package that provides protection for members’ benefits,” said Southern.

The two schemes, one of which relates to Morrisons’ takeover of rival Safeway in 2004, are both in surplus on an ongoing funding basis, and benefit from security in the form of freehold properties held within a pension funding partnership structure.

However, the aim of the trustees has been to get the schemes to a funding level compatible with a buyout by an insurer, which would guarantee benefits and eliminate any reliance on the company. On this basis, the schemes have an aggregate deficit of £800m and would need additional security before a buyout could be contemplated.

The trustees have already held talks with Fortress, which is backed by Japan’s SoftBank and whose consortium includes Canadian pension fund CPPIB, a unit of Koch Industries and Singapore’s GIC wealth fund, about safeguarding pension funding. They have also held an initial meeting with CD&R.

But they warned that agreement on mitigation measures “should be settled with CD&R or Fortress prior to any shareholder meeting to consider any offer for Morrisons”.

Investors are due to vote on the CD&R offer of 285p a share, which is currently recommended by Morrisons’ board, in early October. However, it is possible that Fortress could table another offer or that the UK’s takeover regulator could order an auction process to decide the outcome.

New legislation, coming into force from October 1, will give The Pensions Regulator new powers to intervene if it is concerned that corporate actions could put members at risk of not getting the pensions they were promised.

The new powers will enable the regulator to pursue anyone who does something to prevent pension scheme members from receiving their benefits in full.

Anyone prosecuted for these offences faces up to seven years in prison and a potentially unlimited fine.

The powers were introduced following a pension scandal involving the high street retailer, BHS, which collapsed in 2016, a year after Sir Philip Green, the billionaire owner, sold the struggling business for £1. The failure of the retail giant left tens of thousands of members of the BHS pension scheme facing cuts of up to 10 per cent to their retirement income.

The Pensions Regulator said: “In our role to protect savers, we are working closely with the trustees of the Morrisons pension schemes and we note they are taking a robust position in terms of securing the best outcome for members in relation to the proposed transaction. This is in line with our expectation that trustees act as the first line of defence for members.”

CD&R and Fortress both said they had already held talks with the trustees and did not intend to change pension benefits. CD&R also said it accepted that trustees expected to hold talks with would-be owners about an “appropriate mitigation package” to give the schemes more security, and that it intended to “continue this dialogue”.

[leadersoffice] 24/8/2021 19:49

I never engage in shorting. I am a buyer and have accumulated over the years and continue to hold my positions in Sainsbury's. Yesterday I made purchases in M&S & Tesco and have been a long term investor in Morrison's. Don't underestimate consolidation in the food retail supermarkets. Just because there have been failed attempts at taking over Sainsbury's' in the past ... does not mean it won't happen in the future. Many British companies are undervalued presently FTSE companies having huge shorting positions. Given the environment we are in right now, one should be careful of continuing to hold such short positions... you never know who's the next candidate for a takeover.