The shares of J Sainsbury, the second-largest supermarket chain in the UK, fell by 6% on Friday after the largest shareholder, the Qatar Investment Authority (QIA), sold almost a third of its stake. According to news from Goldman Sachs, which was reported by the Financial Times, QIA sold about a third of its 14.2% stake in the retailer in a private placement deal at a price of 280 pence per share, generating proceeds of around 306 million pounds.
After the sale, QIA now holds about 9.5% of the shares, just behind the 10.1% held by the investment company of Czech businessman Daniel Křetínský. Sainsbury's shares closed at 271 pence, a total decrease of 9.4% since the beginning of the year, as investors increasingly questioned the company's ability to compete in a fiercely competitive British retail market.
The sale is seen by analysts as part of QIA's "regular portfolio management" strategy. A familiar spokesperson for QIA confirmed that the decision supports the company's strategy, with no connection to upcoming political events such as the budget statement by Chancellor Rachel Reeves. "The reduction of our stake is a natural step within the framework of our long-term investment strategy," said the person.
Sainsbury's announced in February plans to reduce annual costs by one billion pounds, initiate a 200 million pound share buyback program, and implement a "progressive dividend policy." Despite these measures, investor confidence remains low due to the current market situation and competition.
Since QIA's entry in 2007, when it first acquired a stake in Sainsbury's and increased its share to 25%, QIA has been gradually reducing its ownership. By 2021, QIA had already sold an almost seven percent stake in the retailer to Křetínský.
The significance of QIA as a major shareholder is further emphasized by the recent transaction, which could influence the financial stability and strategic direction of Sainsbury's. While QIA has made no official comments, analysts from JPMorgan stated that they do not associate the sales with political events and consider them part of a normal portfolio adjustment.
