KEY POINTS:
Employees at J Sainsbury look set to miss out on a £200 million ($543 million) windfall due to the likely collapse of a £10 billion ($27 billion) bid for the group from a consortium led by the private equity house CVC Capital.
Details of plans to offer as many as 80,000 staff an equity stake in Sainsbury's, worth around 15 per cent of the business, emerged as CVC prepared to walk away from the supermarket chain, as its offer is likely to be rejected by the company's board.
Under the terms of the proposed deal, employees with a certain amount of service at the company would have been eligible to purchase shares in the supermarket group for a nominal fee, which would have led to a bumper payout when the consortium sold, refinanced or floated Sainsbury's at a later date.
It is also understood that, as part of its long-term strategy for Sainsbury's, CVC planned to create around 16,000 jobs at the group across the country, which would have gone some way to addressing union concerns that private equity is all about slashing costs via job cuts.
However, the CVC consortium, which includes Texas Pacific and Blackstone, is likely to walk away if, as expected, its 560p-a-share bid is rejected by the board this week.
Lord Sainsbury, the largest shareholder with a voting stake of just under 9 per cent, has urged the board to reject the "inadequate" offer.
- INDEPENDENT
