EVERYBODY has a bad week now and then, but they don’t get any worse than last week for Robert Tchenguiz. The result was a whopping bill from J Sainsbury for £174m.

The entrepreneur is nursing the loss on his 10% stake in the supermarket giant after the collapse of a Qatari-backed £10.6 billion takeover bid.

It makes him one of the biggest individual losers – along with the Sainsbury family – from the fall-out of the aborted bid.

But in an exclusive interview with The Sunday Times this weekend, Tchenguiz, 47, insisted he has the financial fire-power to cover the deficit.

“We are not gamblers,” he said. “We took a calculated risk on Sainsbury. But obviously we had the credit crunch in the middle. In the short term we have lost money, but this is not the end of the world. Only time will tell, and today’s share price is not the true value of Sainsbury.”

Tchenguiz had hitherto been lauded as one of the most flamboyant and prominent private businessmen in the country, with a £20m mansion next to the Royal Albert Hall, a glamorous wife who runs a Harley Street clinic, two young children and a share in a fortune conservatively estimated at £850m.

His wealth has sprung from a self-made business empire spanning London office blocks to restaurants, pubs and financial services. But during the past few years, as his fortune has grown, so have his ambitions, and Tchenguiz has spread his wings to buy stakes in some of Britain’s largest blue-chip public companies. The biggest investment of all came at the turn of this year, when he snapped up the Sainsbury stake.

When that investment decision turned sour last week, the knives came out in the City and in the media. It was the “£1 billion gamble that went wrong”, one headline screamed. “Like Icarus, he flies too close to the sun,” an observer was quoted as saying.

And as the week unfolded, hedge funds began short-selling shares in other listed companies in which Tchenguiz has amassed stakes. In effect, they were gambling that he would be forced to offload some of his investments to cover the losses on Sainsbury.

But Tchenguiz, whose father moved to Britain from Iran after the fall of the shah in 1979, is a fighter. While the losses may be hurting him, he is not on the verge of collapse and says he has no need to sell down his stakes.

“I’m not Bill Gates, but we have very deep resources,” he said. “The fact is that we have just suffered a huge fall and we haven’t sold a single share.”

As controller of a private company, the entrepreneur has long been reluctant to detail his financial affairs, but friends say the Sainsbury losses, albeit substantial, pale when compared with the £1 billion in profits he has made during the past two years from the sale of investments in Pubmaster, Whyte & Mackay, the whisky company; Shell-Mex house – an office block on London’s Strand – and Sampo, a Finnish financial group.

“People are talking about our position in Sainsbury like there is something unusual going on,” he said, “but our financing on this transaction is no different to any hedge fund. We are carrying the risk – 100% of that risk. We have a bank account and when the shares go down we have to put cash in to cover the margin call. That’s what happens – shares go down and you have to put money in.”

Speaking in his Mayfair office last Wednesday, Tchenguiz was reluctant to lay the blame for the Sainsbury share-price collapse at the door of Delta Two, the Qatari-backed investment vehicle that pulled out of the takeover at the eleventh hour.

The Qatari proposal had been masterminded by Paul Taylor, Tchenguiz’s former colleague, who four years ago helped him table a failed offer for Selfridges, the department-store group.

“There is no point people trying to discredit Paul Taylor,” said Tchenguiz. “He came out of this office and he is a very clever man. He understands real estate and we were always delighted that he was involved.

“The reality is that recent turmoil in the credit markets is almost unprecedented and this deal is not the first to fall out at the final stages – and I suspect it won’t be the last.”

Tchenguiz said he had no regrets about his Sainsbury investment and was already plotting his next move. He said that through Citigroup, his financial adviser, he would soon present new proposals to the Sainsbury board to distil the value in its vast real-estate portfolio.

“My view on Sainsbury hasn’t changed at all,” he said. “There is still considerable opportunity to unlock significant value without any adverse impact on growth or strategic options.”

His investment is for the long term. “We are not in the risk-arbitrage business – we don’t buy to sell.”

Tchenguiz first started stake-building in Sainsbury well before takeover interest in the retailer emerged last February.

He remains tightlipped about his future plans, insisting that he must first present them to the Sainsbury board. But it is likely he will argue that a big chunk of the group’s £8.6 billion property portfolio should be spun off into a listed tax-efficient real-estate investment trust to crystallise its value. Although the credit crunch may have put paid to the property being sold off in a leveraged deal, he believes there should still be significant appetite in the markets for such a blue-chip real estate portfolio if it is floated separately.

Tchenguiz has long been frustrated by the stock market’s apparent failure to recognise the huge value in Sainsbury’s property assets.

Since the bid collapsed, the retailer’s market capitalisation has dropped to only £7.48 billion. When £1.3 billion of the net debt is included, the operating business – a successful supermarket chain generating turnover of £15 billion this year – is worth less than £200m.

“So long as you mix real estate with the operating business no-one gives you value for either of them. Clearly, there must be a constructive way to take this forward,” Tchenguiz said.

Financial modelling by brokers at Cazenove, detailed in a research note from April 30, calculated that if the business was restructured, a stretched valuation of 761p a share could be achieved.

Tchenguiz has long argued that the company’s property assets are worth at least £10 billion – and the operating business should be valued at somewhere between £4 billion and £5 billion.

The board has so far been reluctant to entertain a radical restructuring of the property portfolio – the Sainsbury family, which speaks for 18% of the shares, even more so.

But Tchenguiz is likely to be undeterred and he believes that today his strategy holds true more than ever.

“We have been well served by our strategy for several years and, if anything, believe it is more right-sided than ever.

“Boards, management and shareholders are increasingly coming to the view that companies should step up to doing the things that increase value for themselves rather than letting inertia or complacency open the door for private-equity players.”

NO REGRETS

OBSERVERS have described the eleventh-hour collapse of the Qatari-backed bid for J Sainsbury as nothing short of a shambles. But Paul Taylor, who led the transaction on behalf of the Qatari Investment Authority (QIA) insisted this weekend he had no regrets.

‘We ended up not doing the transaction, but no-one died!’ he said. ‘I have no regrets. Nobody is to blame. The QIA and I are joined at the hip. We like the company, in fact we love the company and we back Justin [King, chief executive of Sainsbury] and his recovery plans.’

The Qataris remain tightlipped about their intentions but are expected to keep their stake. It is thought the deal fell apart because the cost of debt rose by an estimated 20% due to the credit crunch and the equity cheque needed to complete the deal soared from £3.6 billion to £5 billion. The returns no longer made sense and the supermarket may have been placed under financial strain.

Taylor said: ‘That responsibility lay quite heavily on us. We didn’t want the company to come to any harm.’

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