Retail guru Nick Bubb revives Sainsbury's rights issue talk
Shares in supermarket group Sainsbury's fell on Monday after respected retail analyst Nick Bubb revived speculation that the supermarket group may launch a rights issue.
FTSE 100
8,078.86
17:14 25/04/24
Sainsbury (J)
256.60p
16:40 25/04/24
Tesco
289.80p
16:45 25/04/24
Reports have suggested Sainsbury's and struggling rival Tesco may need to go cap in hand to shareholders for cash to bankroll a price war against discounters Lidl and Aldi.
City analysts have been pondering how Tesco will raise money to fund price cuts without taking on more debt while Sainsbury's has launched a strategic review of its dividend policy and funding strategy under new chief executive Mike Coupe.
Bubb highlighted the fact that shares in the food retail sector are cumulatively down as much as 42% so far this year, making it by far the worst performing sector in the entire market this year.
Tesco has half-year results on Thursday and Sainsbury's has its interims announcement on 12 November.
Bubb said: "Well, it looks as if Tesco will keep their powder dry on Thursday on the UK turnaround strategy and play down any rights issue plans, so will that tempt Sainsbury to have a rights issue on the back of its interims/strategy update?"
Shares in Sainsbury's fell 3p or 1.22% to 241.8p at 15;32 in London. Tesco climbed 5.3p or 3% to 179.85p.