Clifford Chance has won a headline instruction from the private equity consortium circling around Sainsbury’s.
The magic circle firm is advising Blackstone, CVC Capital Partners and Kohlberg Kravis Roberts (KKR) which were forced to make their intentions formally known by the Takeover Panel last week.
The group confirmed that they were at the “preliminary stages” of assessing a bid for Britain’s third-largest supermarket chain. Shares in Sainsbury’s then soared on the main list by 14 per cent to £5.07.
Although no formal approach has been made, Sainsbury’s property portfolio, which is mainly made up of its 750 stores, is believed to be worth £7.5bn alone, and many analysts are predicting a bid of at least £10bn from the consortium.
Goldman Sachs and Lazard are advising the consortium on its bid, with RBS and Barclays Capital reputedly financing it.
One possible defence of a bid would be the sale and leaseback of Sainsbury’s property in order to raise cash for its shareholders.
Interest from the consortium comes as a binding agreement stopping Lord Sainsbury from selling the remainder of his holding expires at the end of the month.
KKR and Blackstone are two of America’s biggest buy-out funds and traditionally use US firm Simpson Thacher & Bartlett.
But Clifford Chance’s global head of private equity James Baird has a tight relationship with CVC, including leading the advice for the private equity house’s £3bn bid for Ladbrokes this time last year.
Baird is leading the magic circle firm’s team, together with corporate partners David Pudge and Guy Norman.
Sainsbury’s traditional adviser is Linklaters, where the relationship partner is global head of corporate David Barnes.
Other bidders tipped to possibly join the fray included Texas Pacific, which normally turns to Cleary Gottlieb Steen & Hamilton for legal advice, and Permira, which has strong ties with Clifford Chance.