Sainsburys tipped as takeover target

16,000 jobs in store at Sainsbury's

Sainsburys could be a prime target for a takeover next year, UBS analysts predict, with Qatar's sovereign wealth fund the most likely suitor.

The Qatari Investment Authority (QIA) is already the biggest shareholder in the supermarket chain, with a 26% stake, and is now being tipped to try and acquire the rest.

%VIRTUAL-SkimlinksPromo%It wouldn't be the first time: the QIA first made an offer for J Sainsbury back in 2007, but subsequently abandoned its £10.6 billion bid, citing the credit crunch. Since then, though, rumours have repeatedly circulated that it may be considering another offer.

QIA has a varied list of investments, from a 12.7% stake in Barclay's to French football club Paris Saint-Germain FC. It already owns the Harrods Group, which it bought for £1.5 billion in 2010, and earlier this year was also widely rumoured to be considering an £8 billion offer for Marks & Spencer.

Sainsburys is just one of 13 British companies to feature in UBS's list of 27 prime European takeover targets.

Also high on the list is clothing manufacturer Burberry, which saw its share price plummet after the departure of chief executive Angela Ahrendts was announced in October. Luxury goods firm LVMH is believed to be interested in making an offer.

Other British companies on the UBS list include defence and aerospace equipment manufacturer Chemring, fund manager Man Group and leisure travel firm TUI Travel, which owns eight European airlines as well as Thomson Holidays. Bus and rail firm National Express also features, as do software firm Aveva and cider brewer C&C.

"The TMT (telecoms, media and technology) sector has been very active this past year and will continue to be so, while the financial sector has been quiet for M&A and is likely to remain so while banks improve their financial position," Jonathan Rowley, head of M&A for Europe, Middle East and Africa at UBS, told the Daily Telegraph.

"The industrial sector has been disproportionately quiet, and that's an area that may see a pick-up in activity levels."
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