A real swoop on Sainsbury’s… or the Bestway to be taken over?


A real swoop on Sainsbury’s… or the Bestway to be taken over?

At first sight, family-owned Bestway's pounce on Sainsbury's shares looks like a David and Goliath takeover battle – and that's certainly how the mark

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At first sight, family-owned Bestway’s pounce on Sainsbury’s shares looks like a David and Goliath takeover battle – and that’s certainly how the market read it.

The swoop by the grocery wholesale company, founded by veteran businessman Sir Anwar Pervez, sent Sainsbury’s shares soaring by more than 10 per cent in the days that followed.

Bestway said it wanted to buy more shares after snapping up two tranches worth £270 million, or 4.47 per cent of the business.

At the same time, it released a stock market announcement ruling itself out of a bid for at least six months. But veteran dealmakers are convinced there is more going on than meets the eye.

The Bestway group, led by Pervez and group CEO Lord Choudrey, is not a household name. However, those in the industry are taking this tilt at one of Britain’s most famous businesses very seriously.

Tycoon: Bestway was founded by veteran businessman Sir Anwar Pervez

Tycoon: Bestway was founded by veteran businessman Sir Anwar Pervez

Tycoon: Bestway was founded by veteran businessman Sir Anwar Pervez

The Mail on Sunday understands Bestway has already mandated the help of its existing advisers at investment bank Rothschild, who sold Morrisons for a hefty £7 billion in 2021. Rothschild also advised US supermarket giant Walmart on the sale of Asda the year before.

It is impossible to rule out the possibility that Bestway will launch a bid for Sainsbury’s after six months are up. However, top retail sources say Bestway may prefer to be taken over itself. That would be a more intriguing outcome that could provide Bestway’s owners with an exit from the business while boosting Sainsbury’s profits.

The purchase of another 2 per cent of the shares would place Bestway as one of the top three Sainsbury’s investors. Senior sources say this would give it leverage to canvas the supermarket’s board for it to take over Bestway.

They added that a deal could possibly be done without the need for Sainsbury’s to raise debt finance, by giving shares in the combined group to Bestway’s owners.

They point to Tesco’s takeover of Booker as the perfect model. Tesco bought the business in 2017 and it now makes about a fifth of its £2 billion profit by some estimates if the benefits of shared buying and other cost savings are taken into account.

A combination between Sainsbury’s and Bestway – which also houses one of Britain’s biggest pharmacy chains Well – could add more than £200 million to the supermarket’s bottom line if the Tesco-Booker success is repeated.

With 15 per cent or more of the shares and skin in the game, key figures at Bestway could even get a seat on the board and in advisory roles to help oversee the combination of the two businesses.

Lord Choudrey, the chief executive, and Dawood Pervez, who runs the wholesale business, would be the obvious candidates, sources said. They could keep their highly profitable cement manufacturing and finance businesses in Pakistan separate.

Bestway – owned by the Pervez, Choudrey and Sheikh families – was founded in 1976 and grew from a convenience store chain into a multi-national with interests in wholesale, pharmacy and property.

One issue, though, would be whether the competition authorities would allow a takeover.

Bestway has an annual turnover of approximately £4.5 billion and 28,000 staff worldwide, making it the seventh largest family-owned firm in the UK. It sells groceries, drinks, household goods and tobacco to 130,000 retailers.

All of that could prove tempting to Sainsbury’s at a time when low-price grocers Aldi and Lidl continue to open new stores and cost pressures squeeze profit margins in big chains.

On the Sainsbury’s share register, the Bestway families are rubbing shoulders with Czech billionaire Daniel Kretinsky and the Qatari royal family.

Sir Anwar, 87, ‘still has power’ within Bestway and has an eye on the family’s legacy, the source said.

He came to London from Pakistan aged 21 in the 1950s and worked as a bus driver in Bradford. He started Bestway as a single corner shop in Earls Court in 1963, building a small chain, before branching out into wholesale.

One top executive said: ‘They’ve been following Sainsbury’s for quite a while and they understand the benefits that Booker brought to Tesco.’

Another source said: ‘The success of the Booker takeover could be seen as the template for a way out as the Bestway founders get older, and younger members ask whether this might be a good time to look for an exit.’

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