Tchenguiz calls for property sale to cut Sainsbury debt

SAINSBURY'S shares jumped more than 2 per cent yesterday after property tycoon Robert Tchenguiz said he wanted Britain's third biggest supermarket group to crystallise value from its extensive property portfolio.

Food retailing analysts said the price rise indicated the market felt Sainsbury might still remain in eventual takeover play, despite this week's staggered withdrawal of the private equity consortium of CVC, Texas Pacific Group and Blackstone that had been stalking it.

Tchenguiz, who was not available for comment yesterday, had been reported as saying: "Sainsbury has 1.6 billion of debt and a capital value of 10bn. In anybody's book, this is a bad capital structure."

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Tchenguiz went on to say that he wanted the group, in which he has built a stake above 5 per cent, to release value from its property portfolio of 750 supermarkets.

"This is a real estate company with a retail business on the side," he was reported as saying.

His comments came two days after the collapse of a 10bn-plus private equity bid approach for Sainsbury just ahead of yesterday's deadline set by the City's Takeover Panel for the suitors to put up or shut up.

One analyst said yesterday: "The fact that Sainsbury's shares have not collapsed suggest the market does not necessarily believe this is the end of the story.

"Possibly there will be another bidder, or like Tchenguiz wants, some sort of property sale and leaseback by Sainsbury to release shareholder value as its trading recovery under Justin King [the chief executive] continues."

Sainsbury's shares yesterday closed up 11.5p at 534p.

Tchenguiz's investment vehicle, Razino, boosted its stake in the supermarket group from 4.68 per cent to 5.07 per cent, according to a regulatory filing on Thursday.