LONDON: Qatar sold a £1.4bn ($2.3bn) stake in British bank Barclays yesterday, stoking market expectations it will use a big profit to make a move on UK food retailer J Sainsbury.
Qatar owns 26 percent of Sainsbury and the retailer’s shares jumped by a fifth last Thursday on talk the sovereign wealth fund was planning a renewed offer for it. A previous bid attempt failed in 2007.
Qatar Holding made a profit of about £600m ($985m) by exercising half its warrants in Barclays and selling the shares.
It remains the bank’s biggest shareholder, and is the second Middle-Eastern investor to make a big profit from Barclays this year, after Abu Dhabi made $2.5bn on the sale of an 11 percent stake in June.
The shares were sold by Credit Suisse through an accelerated bookbuild at 360 pence apiece.
The Qatar Investment Authority (QIA) was mulling an offer at 420p per Sainsbury share, traders said last week, well below its 2007 proposal of 600p a share.
“I think around £5 would be a more realistic price than the one people were talking about last week,” said S&P Equity Research analyst James Monro.
Other analysts agreed a bid would need to be pitched at 500p or above, citing attractive property assets, an ambitious growth plans and the 15 percent stake still held by the Sainsbury family.
QIA bought most of its Sainsbury stake at 575 pence a share, and then some more at 595 pence. Sainsbury and QIA declined to comment.
Qatar will still hold a stake of about 7 percent in Barclays and said its move was part of its portfolio management programme and it intended to remain a long-term shareholder in the bank.
It sold 379.2 million shares after exercising warrants at a price of 197.775 pence. Qatar Holding owns another £750m of warrants and Abu Dhabi’s sovereign wealth fund owns £1.5bn of warrants, all exercisable at 197.775p apiece.
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