UK - Trustees at J Sainbury plc's pension scheme have written to Delta Two Limited, the Qatari-backed investment group which has approached the retail group, seeking more information about its proposals.
Chris Matthews, a spokesman for the pension fund trustees, said they had requested a meeting and were awaiting a response.
Under current proposals Delta Two has made a proposal to the board of Sainsbury to acquire the ordinary share balance of the retailer at a price of 600 pence in cash per share.
This is in addition to the 7.35 pence cash dividend to be received by shareholders of Sainsbury on 20 July 2007. If made, the offer would be funded by an investment of £4.6 billion in the form of equity and subordinated PIK shares and notes, and debt finance of £6 billion provided by a banking syndicate.
An additional £3.5bn has also been promised over the next five years to fund measures such as new store expansion.
No decision has yet been made from Delta Two and J Sainsbury on the way forward.
Richard Jones, principal at Punter Southall Transaction Services (PSTS), felt the trustees would certainly be concerned about the £6bn in debt used to finance the bid.
In terms of some of the options available to trustees, Jones said money could be poured into the scheme or its investment strategy could be altered.
He said: “The level of bargaining powers depends on the trust deeds and rules and it varies by scheme.”
J Sainsbury’s pension schemes are valued at approximately £4bn and currently have 87,000 members. According to figures from October 2006 the total deficit for the schemes was estimated at £477m.
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