Sainsbury (j) Share Discussion Threads

[loganair] 07/2/2023 12:18

Market struggles to untangle implications of Bestway’s Sainsbury’s investment - By Alec Mattinson:


Bestway’s shock investment in Sainsbury’s last week sent City tongues wagging and the supermarket’s shares to 11-month highs as the market attempted to decipher the implications.

On 27 January, Bestway announced it had accumulated a 3.45% stake in Sainsbury’s, costing around £193m at its previous closing price. Openly inviting interested investors to get in touch Sainsbury’s shareholders to get in touch so it could further grow its investment, that stake had built further to 4.45% by 1 February.

Sainsbury’s share price was buoyed by the news – rising 5.5% on the day, a further 4.5% the following Monday, and overall had risen by 12.2% by Thursday lunchtime to 268.7p, its highest level since February 2022. The shares rallied on the overriding feeling that Bestway’s move is more significant than the passive investment its own announcement seemed to suggest. But the market is little clearer on what that significance entails.

A precursor to a full takeover bid was raised as a possibility, but CMC Markets’ Michael Hewson was unconvinced: “While concerns about a takeover might have some merit, one only has to look at what’s happened with Morrisons and Asda to realise how any bid, if it were to happen, might end up becoming a very expensive proposition, in what is an incredibly competitive marketplace.”

At the very least, the stake is a sign that Bestway “wants a seat at the table”, according to AJ Bell’s Russ Mould. “Having a stake above 3% arguably gives Bestway the power by which to demand proper conversations with the business and push for a seat on the board of directors… It’s very rare for these types of transactions to simply be about making money from owning the shares. [The investment] suggests it is serious about wanting to collaborate [and] implies that this is going to be a hands-on relationship.”

Shore Capital said the “surprise̶1; move was “interesting” and “distinctive”, but questioned if Bestway had either the aspirations or the resources for greater ownership aspirations or if it was targeting a trading collaboration. Shore noted that the news shone a focus on Sainsbury’s “undemanding” metrics, noting the shares currently yield 10% on a free cash flow basis. It also suggested the news could lead to short closing in Sainsbury stock to support the share price.

Sainsbury’s shares are still down about 8% year on year despite a strong recent rally from October lows of 168.7p.

The shares had peaked at more than 310p in August 2021 amid takeover rumours following the private equity sales of Asda and Morrisons, but no approach for Sainsbury’s was forthcoming as global market and economic conditions deteriorated.

The supermarket’s all-time share price high was over 600p in mid 2007 and coincided with its largest shareholder Qatar Investment Authority building its stake that eventually led to an aborted takeover bid in 2012.

[dipa11] 04/2/2023 22:28

hTtps://m.marketscreener.com/quote/stock/J-SAINSBURY-PLC-9590189/news/New-shareholder-Bestway-increases-Sainsbury-s-stake-to-4-5-filing-42868162/

[chiefbrody] 03/2/2023 22:02

Let's have Blackrock take us to 300p. The least the parasite shorters deserve.

[dipa11] 03/2/2023 20:27

hTtps://www.shorttracker.co.uk/company/GB00B019KW72/

[loganair] 03/2/2023 18:11

Bestway is no longer a wholesaler. It’s an activist investor… in Sainsbury’s - By Adam Leyland:


It’s easy to dismiss Bestway’s £250m “investment221; in Sainsbury’s as the actions of a tilting upstart. It’s clearly in no position to pull off an acquisition via a debt-fuelled reverse takeover. And timing-wise, it’s arguably missed its moment from an investment point of view. Even before news broke of the 4.5% stake it’s now taken, Sainsbury’s share price was already up almost 50% from its low last October, including a 20% increase this year.

But this is no passive investment, relying on the Sainsbury’s management to boost the Pervez-Choudrey-Sheikh family’s wealth funds. No. We need to think of Bestway as activist investors, like Nelson Peltz, who got himself a seat on the Unilever board (and countless others before) with a stake way smaller than Bestway’s, and has taken an active role in the departure of CEO Alan Jope and the appointment of Hein Schumacher. Or Kelso Group with its new 0.4% stake in THG. Or MS Galleon, a Vienna-based investor that is trying to use its 30% stake in Topps Tiles to oust CEO (and ex-Sainsbury’s exec) Darren Shapland and make the DIY chain stock more tiles from a manufacturer it owns.

Bestway is “looking forward to supporting the executive management team”. That means altering the Sainsbury’s strategy, and with a view to bolstering the fortunes of Bestway in a far broader sense than shares alone. Sainsbury’s, of course, pulled out of its fledgling wholesale supply deal to focus on “food first”. But teaming up with other Sainsbury’s investors like Daniel Kretinsky and the Qatar Investment Authority, Bestway could form a powerful lobby for change, putting pressure on the Sainsbury’s board to do “a Tesco-Booker”. That deal achieved £200m of synergies, and who’s to say the combination of the Well pharmacy, retail franchise arm, combined buying capabilities, a strong property portfolio and better cash discipline couldn’t do something similar?

With a paper deal for a 10%-15% stake, Sainsbury’s wouldn’t even have to hand over any cash. So Sainsbury’s would remain a public company but controlled by Bestway and other non-execs. Smart, eh?

[dipa11] 03/2/2023 06:13

hTtps://www.britishbulls.com/m/SignalPage.aspx?lang=en&Ticker=SBRY.L

[bountyhunter] 02/2/2023 18:44

Hopefully see a TR1 soon.
That short link is in the header by the way. I'm surprised that shorts are now down further.

[dipa11] 02/2/2023 18:14

hTtps://shorteurope.com/details_company.php?company=J%20SAINSBURY%20PLC&land=united_kingdom

[loganair] 02/2/2023 17:54

In the way you mentioned, I doubt very much any of the UT trades had anything to do with Bestway.

If any institutional share holder sells privately / directly to Bestway, will not show up under Trades.

[bountyhunter] 02/2/2023 17:46

Could Bestway pick up significant additional shares as part of the the 2.5m UT?
No surprise that Bestway are playing down takeover speculation as we have said before.
I wonder how long it will be before we see a 5%+ TR1 from them.

[loganair] 02/2/2023 17:45

Bestway has played down speculation of a potential takeover, saying it was buying Sainsbury’s stock for “investment purposes” - now having bought around 100mln shares in the FTSE 100-listed supermarket.

Analysts suggest Bestway is pushing for a “seat at the table” on Sainsbury’s board, hinting towards a future partnership between the two.

[loganair] 02/2/2023 17:43

Volume is not so important, it seems to me reasonable to say, it is the number of £200,000 plus in value trades that are important.

[bountyhunter] 02/2/2023 17:38

Thanks, I'd forgotten the details of UTs. I've updated the header charts to include volumes as I agree they are worth keeping an eye on in the current circumstances.

[loganair] 02/2/2023 17:22

UT - Is just an Uncrossing Trade, where loads of little trades are uncrossed and shown as a single trade with the price given being the average price over all the said trades.

[bountyhunter] 02/2/2023 17:15

UT after the bell for 2.5m

[loganair] 02/2/2023 17:05

Unlike yesterday, no big share Buys today.

[bountyhunter] 02/2/2023 08:00

We should see a 5% TR1 before too long I suspect.

[smurfy2001] 01/2/2023 21:47

Ha ha, good luck.

[loganair] 01/2/2023 21:12

Apart from the 5 Buy trades I've already mentioned, there were also 27 further Buys of £100,000 or more of which 16 of these where above £200,000.

[chiefbrody] 01/2/2023 21:09

A profit is a profit so not the end of the world.Roll on 300p lol.

[bountyhunter] 01/2/2023 20:35

Exactly, it's no surprise although quite possibly disingenuous that Bestway has said no bid is intended. They can forget about that in 6 months time after accumulating a sizeable stake or if someone else bids in the meantime.

[loganair] 01/2/2023 20:26

One thing I can see, is the broker / advising bank who is buying the shares for Bestway will do every thing they can to keep Sainsbury's share price down, to stop them rising.


I notice there were 3 x 921,501 Buys reported after hours and all 3 for the same price??? + after hours 329,724 and 280,000. I would say all 5 trades are far too large for the Private Retail Investor.

[loganair] 01/2/2023 19:24

At most, Costcutter only has 1/2% UK grocery market share and also they're' not full of petrol forecourts as ASDA had.

[bountyhunter] 01/2/2023 19:21

Fair point, I was thinking back a few years but yes Costcutter is smallish in scale, so not comparable with the situation below which is potentially good for Sainsbury's shareholders.

"On April 25, 2019, Asda and Sainsbury's announced that the proposed merger was formally blocked by the CMA."