A Qatari-backed investment fund has abandoned its takeover bid for Sainsbury's, the UK's third-largest supermarket chain.
Delta Two, backed by the foreign investment arm of the gas-rich gulf state Qatar, said it was withdrawing the bid because of turmoil in global credit markets and concerns about pension provisions.
In a statement to the Stock Exchange, Delta Two-which approached the UK firm in July with the offer-said its decision to pull out was due to concerns about the "deterioration of credit markets", which made it more difficult and expensive to raise the debt needed to fund the huge transaction.
"Delta Two has regrettably concluded that a recommendation to proceed with the proposed transaction would not be in the best interest of stakeholders," said Paul Taylor, who was heading up the proposed bid.
Growing speculation
The UK Takeover Panel had given Delta Two until Thursday to decide whether or not to press ahead with the bid.
Speculation had grown in recent weeks that the Delta Two bid, was in trouble with worries about how the proposed £10.6 billion bid would be funded.
Shares in Sainsbury's, which had yet to back the offer, fell nearly 19 percent or 105 pence, at 450 pence in early trading in London in response to the news.
Despite the collapse, Delta Two still owns more than a quarter of Sainsbury's shares.
November 5 2007