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Sainsbury's shares rise as Marks & Spencer reveals it is mulling takeover bid

Sainsbury's shares rise as Marks & Spencer reveals it is mulling takeover bid

Marks & Spencer Group PLC, Britain's largest clothing retailer, revealed Thursday that it had been mulling over a takeover of struggling supermarket chain J. Sainsbury PLC.
M&S said it had decided not to make an offer "at this time," but did not rule out a future bid, sending Sainsbury shares 2.2 percent higher to 522.5 pence (US$10.27; euro7.77).
M&S Chief Executive Stuart Rose has previously declined to comment on weeks of speculation that the company would make a bid for Sainsbury's.
The company's statement to the market on Thursday followed an announcement last month by a private equity consortium comprising CVC Capital, Blackstone Group LP and Kohlberg Kravis Roberts & Co. that they were considering a bid in what would be Europe's biggest leveraged buyout.
A combination of M&S and Sainsbury's, Britain's third-largest grocer, would create a business with more than 1,100 stores across Britain.
Sainsbury's was Britain's largest supermarket chain just over a decade ago but has slid down the rankings amid tough competition from market leader Tesco PLC and No. 2 Asda Group PLC, which is owned by Wal-Mart Stores Inc.
The company is just over halfway through a three-year recovery program begun by Chief Executive Justin King, who was head hunted from M&S in 2004 for the task. King has slashed jobs, cut a quarter of Sainsbury's headquarters positions, shut underperforming stores and improved the supply and distribution chain.


Updated : 2021-10-22 18:41 GMT+08:00