A union has urged the Government to block the takeover of J Sainsbury by Delta Two, the Qatari-backed investment fund, saying that it would make the country’s third-largest super-market less competitive and would lead to higher prices.

Brian Revell, the T&G’s organiser for food and agriculture, said: “How on earth can it be in Britain’s interest to allow Sainsbury’s to become the nationalised property of a Gulf state?”

The comments from the T&G, a division of the Unite union, come as Sainsbury’s board mulls a £10.4 billion approach from Delta Two, which already owns 25 per cent of the super-market, filed earlier this week.

The FTSE-listed company’s advisers have sought clarification from the Qatari-backed fund over the details of its funding, due diligence requirements and plans for Sainsbury’s pension fund deficit.

Further exchanges of information are expected before the board decides whether to allow Delta Two to inspect Sainsbury’s books. A decision is expected some time next week.

Sources close to the deal said that Delta Two had already outlined plans to make a traditional offer to shareholders, a method which requires acceptances from only 50 per cent of investors in order to gain control of the company, rather than a scheme of arrangement, which requires acceptances from 75 per cent.

Delta Two’s plan to structure its bid as a straight offer would give it more leeway to secure a bid without the backing of the Sainsbury family. They control 18 per cent of the firm’s stock. The family is thought to oppose a bid that would increase the level of debt in the company or lead to the sale of its freehold property assets.

Delta Two’s plans are likely to be unattractive to the family because it has said that it would fund a bid with £6 billion of debt and a further £1 billion payment-in-kind loan.

The fund also wants to split off Sainsbury’s property, which is worth more than £8 billion, into a separate entity, although both property and operating companies would be controlled by Delta Two under its takeover plan.

It is understood that Delta Two has not contacted the company’s pension fund trustees or Robert Tchenguiz, the property entrepreneur who is a key shareholder, because it believes that such a move would be “inappropriate” until the supermarket’s board has had time to consider the takeover proposal.

However, members of the Sainsbury family flew to Sardinia last week to meet Sheikh Hamad bin Jassim bin Jaber al-Thani, the Qatari Foreign Minister, who heads Delta Two’s backer, the Qatar Investment Authority.

The T&G said that Delta Two should not be allowed to take control of Sainsbury’s because the store group was a national icon. It was also important to the British retail market because it controlled 18 per cent of the nation’s food supply.

“It is probably that the new owners will seek to split the property from the retail business. This will lead to higher prices and a less competitive Sainsbury’s,” Mr Revell said. The union has more than 20,000 members in Sainsbury’s stores and distribution centres.

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