J Sainsbury may look at options to release value from its large estate of freehold stores but will continue to resist pressure to sell it off.

The emergence of a Qatari-backed property investment firm as the supermarket’s biggest shareholder last week has complicated life for Justin King, the Sainbury’s chief executive, who has faced calls from Robert Tchenguiz, the entrepreneur who owns 5 per cent of the supermarket’s shares, to split off its £8.6 billion property assets. Some commentators believe that Delta (Two), the Qatari-backed investment vehicle that now owns 25 per cent of Sainsbury’s, wants the same thing.

However, the Qataris are yet to make their plans fully clear to Sainsbury. Until they do, Mr King ruled out a wholesale sell-off or a huge sale and leaseback deal, although other options, such as borrowing against the estate’s value, might be.

He said: “The management’s view, supported widely by shareholders, is that splitting the company into property and operating companies is not in the long-term interests of the company – but the management has a completely open view about using property to raise money for the company, as we did last year.”

BACKGROUND

• Asda acknowledges cost of price war

• Bankers feel pinch as QIA ditch Sainsbury’s

• King’s rallying cry as managers count cost

• Qatari group poised to walk away from Sainsbury’s

• Small business 'dismay' at supermarket probe

Multimedia

• Hear Siobhan Kennedy on Sainsbury's

Robert Tchenguiz bruised but unbowed

The entrepreneur is nursing a £174m loss after the failure of a Qatari-backed bid for Sainsbury

BACKGROUND

• Report claims grocery monopoly is impossible

• Sainsbury’s suitor ranked second-worst in survey

• US to press for sovereign wealth funds restrictions

• Sainsbury’s chief eager to stay after takeover

• UK supermarkets accused of price-fixing

Delta has has hired advisers from Dresdner Kleinwort and Credit Suisse, also raising speculation that a full-blown bid for the retailer may be on the way.

The investment firm, which is advised by Paul Taylor, is expected to meet Sainsbury’s in the next few weeks as part of the normal round of shareholder talks.

A source close to Sainsbury’s would not comment on whether any meeting had been planned, but said: “We are happy to talk to them any time they wish. We welcome an open dialogue with all our shareholders.”

The retail industry is agog with gossip about Delta’s plans. One source said: “The suspicion is that they are minded to go the whole way for somewhere north of 600p.” Other sources said that the Qataris could remain as long-term investors without making a move for the company. Sainsbury’s rebuffed a private equity takeover attempt earlier this year.

Delta is known to have approached Stuart Rose, Marks & Spencer’s chief executive, in February about the possibility of mounting a joint bid. That plan never got off the ground and the high street retailer’s board quickly decided that it was not interested in bidding for Sainsbury’s.

Sainsbury’s yesterday revealed a 5.1 per cent rise in underlying sales in the 12 weeks to June 16, against a 5.9 per cent rise in the previous quarter.

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