UK - Qatari investment company Delta Two has abandoned its takeover bid for supermarket J Sainsbury's, blaming poor credit markets and issues with funding its pension scheme.
The deal worth £11bn ($22bn) had been in negotiations since July and was called off late Sunday night, a few days ahead of the 8 November deadline for the acquisition.
Delta Two said the funding requirements of the pension scheme and state of the global credit markets led to questions about how the company could remain a “robust competitor” in such “challenging industry conditions”.
Paul Taylor, principal of Three Delta, strategic investment advisor to Delta Two, said: “Delta Two has strict investment criteria. Having given careful consideration to the additional funding requirements, we have regretfully concluded that a recommendation to proceed would not be in the best interests of stakeholders.”
In a statement, John Adshead, chairman of trustees for the Sainsbury's Defined Benefit Pension Schemes, said the trustees had been working with Delta Two on the fine detail of the proposed agreement, but by far the most significant element under discussion was the security package designed to protect the schemes over the longer term as a result of the increased uncertainty resulting from a takeover of the company.
He said the priority was to protect members interests. "This will continue to be our prime responsibility and our continuing focus will be to ensure that the benefits earned by all members of the schemes are properly funded and secured," he said.
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