Sainsbury's rises with private equity shark Fortress still on prowl

Sainsbury’s shares rise with private equity predator Fortress still on the prowl after losing Morrisons auction

Shares in supermarkets were on the charge amid speculation that private equity sharks are still scouring the UK for deals.

Over the weekend, Clayton, Dubilier & Rice beat US giant Fortress in an auction for Morrisons. But despite losing out, Fortress remains on the prowl.

Joshua A Pack, managing partner at the private equity group, said: ‘The UK remains a very attractive investment environment from many perspectives and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value.’

Takeover talk: Investors suspect US private equity giant Fortress will target Sainsbury's after losing in an auction to buy Morrisons

Takeover talk: Investors suspect US private equity giant Fortress will target Sainsbury’s after losing in an auction to buy Morrisons 

This set tongues wagging in the City, with private equity firm Apollo also understood to be looking to spend its ‘dry powder’ in the UK. 

Shares in Sainsbury’s were up 3.4p ,or 9.6p, at 294.1p, Tesco climbed 1.5 per cent, or 3.7p, at 251.65p, while Ocado added 0.6 per cent, or 10.5p, to 1665.5p and Marks & Spencer gained 1.2 per cent, or 2.25p, at 183.85p.

Investors view Sainsbury’s as the most likely target.

So concerned is the supermarket giant, that it has hired boutique advisory Robey Warshaw to help it prepare for a potential takeover bid. 

But Tesco – despite its £20billion market cap – could also be snapped up.

Danni Hewson, analyst at AJ Bell, said: ‘Fortress is said to be keen for another foray then there’s a few murmurings that Apollo might consider switching tack after losing the battle for [inhaler firm] Vectura to big tobacco.’