If Morrisons’ valuation is underappreciated enough to spark a bidding war among private equity firms, Sainsbury’s should scream value. The stock market has slapped an enterprise value/adjusted cash profit multiple of just under six on the orange-bannered grocer, a cut price on Morrisons, even before institutions began circling, and Tesco too.
First-quarter trading figures may give management a needed helping hand in forming a defence against any suitors attempting to launch a low-ball takeover. Like-for-like sales excluding fuel were up 1.6 per cent over the 16 weeks to June 26, ahead of management expectations. On a more meaningful two-year basis, that increase equated to 10.3 per cent, not too much of a slowdown on the 12.4 per cent growth posted for the fourth quarter,
