Costcutter owner Bestway discussed Sainsbury’s takeover before buying £193m stake
The billionaire family that has taken a £200m stake in Sainsbury's discussed a takeover of the supermarket, The Telegraph can disclose.
Dawood Pervez, the managing director of Bestway Wholesale and son of the company’s founder, was advised to make a bid for the supermarket 10 months ago, it is claimed.
It came as it emerged that Bestway acquired a 3.5pc stake in Sainsbury’s worth almost £200m. The family-owned business has denied plans to make a takeover bid but said it may buy more shares at a later date.
Colin Graves, the founder of the Costcutter chain of convenience stores, said he had talked about a swoop for Sainsbury’s with Mr Pervez less than a year ago.
Mr Graves, who launched 1,700-store chain Costcutter in 1986 and is the former England and Wales Cricket Board, said: “Bestway's stakebuilding in Sainsbury's did not come as a complete surprise to me.
“I had dinner with [Bestway Wholesale managing director] Dawood Pervez 10 months ago and he asked for advice on what to do with the wider Bestway business. His concerns were that the group needed pulling together rather than being fragmented as it is currently.
“I told him that the simplest answer would be to go out and to take Sainsbury's private and combine the two groups. And it now looks like Bestway has taken my advice.”
Founded by Pakistani-born Sir Anwar Pervez in 1976, Bestway began as a convenience store group but has since diversified across the wholesale grocery, pharmacy, real estate, cement and banking sectors.
The group employs 28,000 people globally and is owned by the Pervez, Choudrey and Sheikh families.
Sir Anwar, 87, who is worth an estimated £1.3bn, emigrated to England in 1956 where he took his first job as a bus conductor and driver in Bradford, working seven days a week on double shifts.
His Bestway empire swelled significantly after buying Costcutter in December 2020. The group posted a pre-tax profit of nearly £400m on £4.5bn of sales in the year to June 30.
The company bought the Co-operative Group’s pharmacy business for £620m in 2014. It also owns Well Pharmacy, the largest independent chain with 745 branches across the UK.
Sainsbury’s shares rose by as much as 6pc following Bestway’s announcement, adding more than £300m to the company’s market value of £7.3bn.
Based on Sainsbury's share price at close on Thursday of 239.4p, Bestway’s stake is worth around £193.4m.
Bestway said it had no plans to make an offer for the grocer but said it may look to purchase more shares at a later date.
However, Bestway has the right to make an offer with the agreement of Sainsbury's or if another business puts a deal on the table, it said.
Sainsbury’s and its larger rival Tesco have been left as only two listed supermarket chains of scale. The billionaire Issa brothers acquired Asda in 2020 and US private equity firm Clayton, Dubilier & Rice acquired Morrisons in 2021.
Sainsbury’s has also been linked with a take-private swoop. In January 2021, hedge funds began increasing bets that the supermarket was a takeover target after Canadian convenience store operator Alimentation Couche-Tard said it was examining takeover targets, when a €16bn deal with French supermarket Carrefour was blocked by politicians in Paris.
Qatar Investment Authority is currently a major shareholder in Sainsbury's with more than a 14pc share of the supermarket, with Czech billionaire Daniel Kretinsky’s Vesa Equity Investment holding a 10pc stake.
Clive Black, an analyst at house broker Shore Capital, said: “The news comes as a surprise to us and may spark some chatter around both Sainsbury and the wider sector with respect to corporate activity and equity values.”
A spokesman for Bestway declined to comment beyond its statement to investors.
Sainsbury’s said it would “engage with Bestway Group in line with our normal interactions with shareholders”.