Sainsbury’s shares fall as Qatar ends near-20 year spell as biggest investor

Supermarket Sainsbury’s has seen its shares sink lower after its long-standing largest shareholder sold down its stake in the supermarket, ending nearly 20 years as its top investor.

Shares in the FTSE 100 firm dropped 4% in Wednesday trading after Qatar’s sovereign wealth fund said it planned to cut its stake by nearly 4%, down from 10.5% currently to 6.8%.

The stake sale means Qatar’s sovereign wealth fund will no longer be the biggest investor in Sainsbury’s for the first time since 2007, with Royal Mail owner, Czech billionaire Daniel Kretinsky, instead becoming its largest shareholder.

Qatar Investment Authority (QIA) said after market close on Tuesday that it plans to sell up to 98 million ordinary shares in Sainsbury’s, but gave no reason for the sale.

It follows a recent jump in Sainsbury’s shares, which are up by nearly a quarter so far this year.

The QIA’s stake peaked at 25% in 2007 – the year the group also ditched a potential takeover bid for the retail giant.

It has been selling down its stake since 2021.

Sainsbury’s recently upgraded its annual outlook, saying it is now set for retail earnings of more than £1 billion after a better-than-expected half-year performance.

The UK’s second largest grocer, which also owns the Argos chain, reported an underlying operating profit of £504 million for the 28 weeks to September 13, up slightly on last year’s £503 million and better than the group had forecast.

The group revealed talks in September to sell Argos to Chinese e-commerce giant JD.com, but discussions swiftly collapsed over a failure to agree on terms and price.