Texas Pacific Group (TPG) has joined the CVC-led buy-out team working on an £11bn bid for Sainsbury’s in a move that is hampering rival private equity groups looking to form a competing consortium, reports the Financial Times.
The Times reports Goldman Sachs is also said to be poised to join the CVC-led consortium and The Daily Telegraph says Apax is the latest private equity group rumoured to be looking at a possible bid.
The Financial Times says TPG’s move leaves Cinven and Bain Capital looking for other parties if they decide to go after the food retailer.
It also emerged that a group of investors from
Merrill Lynch estimates selling off the nine leading European supermarket chains’ property portfolios could raise €67bn (£44.1bn) of untaxed proceeds for investors.
However, while selling Tesco’s property, for example, could generate £15bn, the free cash flow of the operating company would be weak, even negative if it continued to spend more than £3bn a year on capital expenditure.
Yet many shares already seem to be pricing in the realisation of property values. Lex, in the Financial Times, says valuing retailers as if there were property companies that sell a bit of food might prove a passing fad.
Meanwhile, both Tesco and William Morrison enjoyed a good day on the market as analysts pointed to the scope to value them as both property and operating companies.
07/02/07 Financial Times 16, 17, 18, 40, Times 41, 53, 55, Daily Telegraph B3, B5, B7, Guardian 25, 26, 28, Independent 36, 44
