Bestway, the owner of the Costcutter chain and is one of the UK’s largest grocery wholesalers, has taken a near £200m stake in Sainsbury’s and could seek to increase its stake further.
The privately owned Bestway, which also owns the UK’s third-largest pharmacy chain and 2,000 convenience stores under the Costcutter and Best-one brands, has bought almost 81m shares, giving it a 3.45% stake in the UK’s second-largest supermarket chain.
“Bestway Group intends to hold its shares in Sainsbury’s for investment purposes and looks forward to supporting the executive management team,” the company said. “Bestway Group may look to make further market purchases of Sainsbury’s shares from time to time, subject to availability and price.”
The move will result in the company, the seventh-largest privately held business in the UK, with an annual turnover of £4.5bn, becoming the sixth-largest shareholder in Sainsbury’s.
Bestway, which said it is not considering making a takeover bid for Sainsbury’s, did not disclose how much it paid for the stake. However, at Sainsbury’s closing price on Thursday of 239.4p, the stake is valued at £193m.
Shares in Sainsbury’s jumped almost 6% on Friday morning to 253p, making it the top riser on the FTSE 100.
“We note the announcement made this morning by Bestway Group stating that it is not considering an offer for the company,” Sainsbury’s said. “We will engage with Bestway Group in line with our normal interactions with shareholders.”
Bestway, which was founded in 1976 and is chaired by the billionaire Sir Anwar Pervez, is one of Britain’s biggest food wholesalers, serving thousands of retailers.
It owns the Well pharmacy chain, which it bought from the Co-op in 2014 and has 760 outlets, making it the third largest in the UK. It also owns one of Pakistan’s largest banks and is the country’s second-biggest cement manufacturer.
