LONDON (AFP) - Britain's third-biggest grocer, J Sainsbury, is the target of a five-billion-pound (7.2-billion-euro, 9.1-billion-dollar) takeover bid.
George Magan, a corporate financier and former treasurer of Britain's Conservative party, is trying to secure finance from private equity backers and banks to buy the ailing supermarket chain, The Sunday Telegraph reported.
Takeover rumours come days after the grocer announced it would halve its dividend and cut costs to fund price reductions and a sprucing up of its image in an effort to reverse flagging fortunes.
Sainsbury is to take 550 million pounds (792 million euros, 990 million dollars) of one-off charges this financial year after an ill-fated decision to sink three billion pounds into supply-chain and information technology improvements.
Sainsbury's share of Britain's 100-billion-pound annual grocery market has dwindled by 0.6 percentage points to 15.3 percent over the past year alone.
Its fortunes are in stark contrast to market leader Tesco, which last month reported record first-half profit, and whose shares have gained 21 percent in the past 12 months.
Sainsbury has been considered vulnerable to a takeover bid after losing ground over the past 12 months to Tesco and Asda, the second largest British supermarket chain.
Any successful offer would also need the blessing of the founding Sainsbury family, who currently own 35 percent of the company between them.
10/24/2004 - 14:04 GMT - AFP