Sainsbury's 'dream bid' hope

J SAINSBURY's shares picked themselves up from a near-18 month low today as long-suffering shareholders' appetites were whetted by talk of 'dream team' bids for the ailing supermarkets giant.

Top corporate financier and sometime Tory Party treasurer George Magan is reportedly hatching a £5bn offer for Britain's third-largest supermarkets chain. Potential front men for any bid are reckoned to be ex-Asda bosses Archie Norman and Allan Leighton.

While Magan today attempted to play down the strength of his interest in launching a bid, saying reports have been exaggerated, Sainsbury shares were 6p stronger at 252 1/2p.

That, however, is still a 20% discount to the share price at the start of a year in which the chain has been dogged by controversy, not least the departure of former chief executive and would-be chairman Sir Peter Davis.

Despite new chief executive Justin King's aggressive plans to reshape the group, analysts believe this year's key Christmas trading period will be make-or-break for the current regime.

Several venture capital houses are thought to have preliminary takeover plans in progress and Norman and Leighton are regarded as perfect frontmen. Norman has said he is standing down as a Tory MP and Leighton is believed to be frustrated by Government restrictions on what he can do with the Royal Mail, which he chairs.

Any takeover bid for the retailer will need to take account of the Sainsbury family holding, which stands at around 35%.

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