News Releases
20th September 2007
Joint statement by Delta (Two) Limited and J Sainsbury PLC
• New commitment letters from Delta Two’s financing banks in respect of debt facilities totalling £9.6 billion
These facilities (provided by ABN Amro NV, Credit Suisse and Dresdner Kleinwort Limited) together with the £4.85 billion of committed funding from ordinary shares, preference shares and payment-in-kind notes would be used to fund the offer, repay existing Sainsbury’s debt and inter alia provide long term financing for the Sainsbury’s group following an acquisition of Sainsbury’s by Delta Two.
• The appointment of a non-executive Chairman to the Board of Sainsbury’s and enhanced reporting and disclosure standards
Tony Campbell, former Deputy Chief Executive of ASDA Group plc (“ASDA”), would become non-executive Chairman of Sainsbury’s following completion of any offer by Delta Two. Delta Two intends that Sainsbury’s would adopt the guidance in the Walker Report relating to enhanced reporting and disclosure standards for privately-owned companies.
• Delta Two business plan and capital structure
Prior to reaching agreement on a process for due diligence, Delta Two and Sainsbury’s held extensive discussions on Delta Two’s proposed capital structure and its plans for the business, including the implications for stakeholders.
Delta Two’s business plan is focused on growth, envisaging £3.5 billion of capital investment over the next five years to fund new store expansion, the continued refurbishment of existing stores, further development of Sainsbury’s’ non-food offering and continued investment in infrastructure. Delta Two has provided assurances that Sainsbury’s will have operational flexibility to compete in order to maintain and enhance customer goodwill. The strong relationships Sainsbury’s has with its suppliers would be maintained, as would its support for the quality and diversity of food production in the UK. Delta Two shares Sainsbury’s management’s view that ownership of property is integral to the long-term success of the business. Accordingly, and in line with management’s current operational strategy, the retail business and Sainsbury’s property assets would remain under common ownership in the same corporate group. In summary, under Delta Two’s ownership, Sainsbury’s would see significant investment and further expansion and would remain a robust competitor in its markets, even in challenging industry conditions.
