Sainsbury’s confirms takeover approaches for banking arm

More than one potential suitor has approached Sainsbury’s about buying its banking arm, the supermarket said on Tuesday, as the Co-operative Bank also revealed it was having discussions about a potential takeover.

Sainsbury’s Bank has been the target of “some very preliminary” approaches, bosses said, but stressed that nothing concrete had emerged.

The banking division has been at the centre of speculation for a long time, and last week Sky News reported that NatWest Group, formerly the Royal Bank of Scotland, was circling.

In response to what it called “press speculation”, Sainsbury’s said: “We have received some very preliminary expressions of interest in the bank, but this does not mean anything will come of these discussions.”

It said the company is still focused on its five-year plan which was laid out last year, and confirmed earlier this month.

“We are on track to deliver that plan despite the impact of Covid-19 and expect to deliver a profit in the second half of this financial year,” the business told investors.

Meanwhile, the Co-operative Bank revealed that it is also in preliminary discussions with a financial sponsor over a non-binding offer.

“The bank has recently attracted an approach from a financial sponsor with knowledge and experience of investing in European financial services businesses regarding the possibility of a sale of the bank and/or the holding company,” it said in a statement to the stock exchange.

Co-op said that it had hired advisers to provide the potential suitor with the information it needs to assess a potential approach.

“The bank continues to be in discussions with this financial sponsor, although such discussions remain at a preliminary stage. There can be no certainty that discussions with this financial sponsor will progress further,” it added.