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Wed 1 Jan 2014 11:09 AM

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Qatar 'most likely' to acquire UK retail giant in 2014

New UBS report names J Sainsbury as prime target for takeover with Qatar tipped to buy bigger stake

Qatar 'most likely' to acquire UK retail giant in 2014
UK supermarket giant J Sainsbury this week moved closer to opening its company books for due diligence to Delta Two, after the Qatari-backed investment fund offered to increase the equity proportion in its 10.6 billion pound ($21.3 billion) takeover bid.

Sainsbury's could be a prime target for a takeover in 2014, according to UBS analysts, with Qatar's sovereign wealth fund the most likely suitor, it has been reported.

The Qatari Investment Authority (QIA) is already the biggest shareholder in the supermarket chain, with a 25.9 percent stake, and is now being tipped to try and acquire the rest, according to a Daily Telegraph article which cites the UBS report.

QIA first made an offer for J Sainsbury back in 2007, but subsequently abandoned its bid, citing the credit crunch. Rumours have since repeatedly circulated that it may be considering another offer.

Qatar investments in the UK have reached more than $34bn, including stakes in Sainsbury’s, BAA (British Airports Authority), London Stock Exchange, Barclays, the US Embassy building in Grosvenor Square and the Shard of Glass development, which is Europe’s tallest building.

Sainsbury's is just one of 13 British companies to feature in UBS's list of 27 prime European takeover targets.

Also high on the list is clothing manufacturer Burberry, defence and aerospace equipment manufacturer Chemring, fund manager Man Group and leisure travel firm TUI Travel, which owns eight European airlines as well as Thomson Holidays.

British grocer J Sainsbury showed its resilience to tough market conditions with a 7 percent rise in first-half profit in 2013, contrasting with a decline at market leader Tesco and lifting its shares to a near six-year high.

Sainsbury's trails Tesco by annual sales and is battling Wal-Mart Stores' Asda to be Britain's No. 2 grocer, but has enjoyed 35 straight quarters of underlying sales growth, boosting its UK market share to a decade-high 16.8 percent.

In February 2010, Qatar Holding bought 25.999 percent of the retailer.

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