Monday 10 November 2014

A Sunday review on a Monday...

Tucked away in the middle of Oliver Shah's story on J Sainsbury in The Sunday Times this weekend was quite an interesting nugget of information that appears to have been overlooked by the market.

Yesterday, Oliver revealed within the body of his news article on J Sainsbury that Crystal Amber, the activist investor run by Richard Bernstein, has been looking at the supermarket group with a view to advising a large US fund on carrying out an activist campaign involving the company.

Here is a link to Oliver's piece:

As we all know, shares in British supermarket companies have tumbled this year amid fierce competition from rival operators Aldi and Lidl.

However, unlike some of its rivals, J Sainsbury has one large strategic shareholder that tried to buy the business a few years ago: the Qatar Investment Authority. The QIA, though, has probably seen the value of its investment in J Sainsbury halve since it built up its stake in 2007, the height of the credit boom.  

Typically, Crystal Amber buys shares in small cap companies but in this situation I understand the investment firm would look to advise a larger fund on running an activist campaign targeting J Sainsbury.

I worked with Oliver on the story (some Betaville readers may have noticed that over the last few weeks I have been doing some freelance work round at The Sunday Times) but we never quite bottomed out which American fund has been looking at carrying out an activist campaign in J Sainsbury.

The obvious candidates would be Elliott and Sandell as the hedge funds were reported earlier this year to have built up stakes in several supermarket companies, including WM Morrison.

I was also told by a entirely separate source that Knight Vinke, which has been out of the activist scene for a while, is looking to announce a fresh European target by the end of the year. Could it be J Sainsbury?  

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