5th Nov 2007 07:01
Delta (Two) Limited05 November 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION INTO OR FROM AUSTRALIA, CANADA,JAPAN OR THE UNITED STATES For immediate release 5 November 2007 DELTA (TWO) LIMITED ("DELTA TWO") ANNOUNCES THE TERMINATION OF DISCUSSIONS WITHJ SAINSBURY PLC ("SAINSBURY") Delta Two has concluded that it is not in the best interests of stakeholders toproceed with an offer for Sainsbury and has informed the Board of Sainsbury ofthis decision. On 18 July 2007 Delta Two announced that it was in preliminary discussions withSainsbury relating to the possibility of Delta Two making a cash offer toacquire the balance of the ordinary share capital of Sainsbury that it did notalready own. Since Delta Two's original proposal was submitted to the Board of Sainsbury, therequired funding and cost of capital has increased significantly, which hasadversely affected the investment case. This reflected a combination of factorsincluding the deterioration of credit markets which impacted the terms oflending and other facilities available to Delta Two following the initialapproach to the Sainsbury Board and the arrangements for the future funding ofthe Sainsbury pension schemes necessary to gain the backing of the Sainsburypension trustees for any offer by Delta Two. In dealing with the fundingimplications presented by these issues, Delta Two's objective has been to ensurethat following acquisition Sainsbury's capital structure would enable it toremain a robust competitor in its markets, even in challenging industryconditions. Paul Taylor, Principal of Three Delta LLP ("Three Delta"), which is thestrategic investment adviser to Delta Two in relation to its investment inSainsbury, said: "Delta Two has strict investment criteria and has approached this opportunity ina disciplined manner. Having given careful consideration to the additionalfunding requirement and its impact on prospective investment returns, Delta Twohas regretfully concluded that a recommendation to proceed with the proposedtransaction would not be in the best interests of stakeholders, and thereforesuch recommendation cannot be made. We greatly appreciate the co-operation ofthe Board and management of Sainsbury, and the constructive and collaborativenature of our discussions with both them and the trustees of the Sainsburypension funds. Sainsbury is an excellent company with a strong management team,leading market position and strong long-term growth opportunities. Delta Tworemains fully supportive of management's operational strategy. " Media Enquiries: Public relations adviser to Delta (Two) Limited: Financial Dynamics - Tel: +44 (0) 20 7831 3113 Giles Sanderson Jonathon Brill Public relations adviser to Three Delta LLP: Abchurch Communications - Tel: +44 (0) 20 7398 7700 Georgina Bonham Julian Bosdet Financial advisers to Delta (Two) Limited: Credit Suisse David Livingstone - Tel: +44 (0) 20 7888 8888 Dresdner Kleinwort John McIntyre - Tel: +44 (0) 20 7623 8000 Important Notice For the purposes of Rule 2.8 of The City Code on Takeovers and Mergers, DeltaTwo, or any person who acted in concert with it or any person who issubsequently acting in concert with either of them, reserves the right to makeor participate in an offer or possible offer for Sainsbury shares within the sixmonths of today's date: (i) with the agreement or recommendation of theSainsbury Board; (ii) if any announcement is made by or on behalf of Sainsbury'sor by a third party relating to the making of an offer; (iii) upon theannouncement by or on behalf of Sainsbury of a "whitewash" proposal (as definedin the Code) or of a reverse takeover (as defined in the Code); or (iv) if thereis a material change in circumstances. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sainsbury's