Sainsbury's shares surge after speculation of US company takeover interest

The UK’s second largest supermarket chain, which has two large shops in Talbot Road, Blackpool town centre, and Red Bank Road, Bispham, saw shares leap more than 12 per cent at the start of trading today.

Both firms declined to comment.

A national newspaper reported Apollo, a US company, had shown an "exploratory" interest.

Shareholders were sent into a frenzy by the report but it is understood that Apollo’s takeover interest is currently primarily elsewhere in the UK supermarket sector.

Apollo remains in talks with a consortium led by private equity rival Fortress to potentially join the group’s takeover offer for Morrisons, for the UK’s fourth largest grocer.

The Fortress-led consortium had been in the driving seat to buy Morrisons for £6.7 billion until rival bidder Clayton, Dubilier & Rice (CD&R) laid a £7 billion offer on Thursday evening.

Takeover interest in Morrisons from private equity had already helped to buoy share valuations across UK supermarket chains in recent months.

Sainsbury’s shares had also been heavily shorted earlier this year and the lift in value has been boosted by a number of exits by shorting investors.

Apollo also recently targeted a takeover of another rival, taking part in the auction process to buy Leeds-based Asda, before it was bought by the Issa Brothers and private equity backers TDR Capital.

Sainsbury’s shares were 12.7% higher at 332.1p after early trading today.