Costcutter owner Bestway takes surprise near-£200m stake in Sainsbury's: reaction

Costcutter and Well Pharmacy owner Bestway Group has acquired a 3.45 per cent stake in supermarket giant Sainsbury’s in a surprise move worth in the region of £193 million

Bestway, which said it is the seventh largest family-owned firm in the UK with a turnover of about £4.5 billion, announced it had acquired or agreed to acquire more than 80.7 million shares in the retailer. Based on Sainsbury’s share price at close on Thursday of 239.4p, the acquisition would be valued at around £193.4m. Bestway said it plans to hold the shares for investment purposes and to support the executive management team, and may look to purchase more shares “from time to time”.

It is not considering an offer for Sainsbury’s at this time. However, Bestway has the right to make an offer with the agreement of Sainsbury’s or if another business puts a deal on the table.

Qatar Investment Authority is currently a major shareholder in Sainsbury’s with more than a 14 per cent stake.

Russ Mould, investment director at AJ Bell, said: “Bestway’s purchase of a stake in Sainsbury’s has come out of the blue. While Bestway says it doesn’t intend to make a bid now, there is logic in putting the two companies together, with echoes of how Tesco thrived from buying Bookers. As the UK’s largest independent cash and carry business, Bestway’s strategy is to be seen as a place where retailers, caterers and cafes can obtain all the stock they need at a good price.”