Qatari fund pushes to seal Sainsbury’s deal

Delta Two is understood to be seeking informal guidance from the Office of Fair Trading (OFT) on whether its£10.6 billion bid for Sainsbury’s would lead to a regulatory inquiry.

The Qatari-backed fund will meet the grocer again this week in an attempt to seal a deal. The supermarket board wants Delta Two to raise the level of equity within its offer by at least£500 million. Sainsbury’s maintains that without this further investment increased debt levels resulting from the deal would make it less competitive.

Delta Two is thought to be unconvinced by this argument and is seeking the advice of the OFT directly. The Times reported that Delta Two, which owns 25 per cent of Sainsbury’s, is unwilling to raise the level of equity above the£4.6 billion proposed and will compare its finance structure to other recent private equity deals.

The supermarket and Delta Two have been in talks for six weeks over the equity issue. The Sainsbury’s board is thought to be keen to recommend Delta’s 600p-a-share bid, but is concerned about regulatory issues and the views of the Sainsbury family, which controls 18 per cent of the stock.

It is understood that both parties want a deal to be struck by the end of September, although some believe that negotiations are becoming strained and it might fall through.