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London Markets: Sainsbury shares slump as UBS interprets Apollo interest as ‘exploratory’

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J Sainsbury shares dropped on Friday, as UBS downgraded the supermarket operator to neutral from buy, while keeping a 300 pence price target, following the gains triggered by the report from the Sunday Times that private-equity group Apollo was considering a bid.

Sainsbury
SBRY,
-2.72%

shares fell 3% to 311.10 pence.

“We think a lack of statement from SBRY/Apollo suggests PE interest may have been exploratory,” said analysts led by Sreedhar Mahamkali. They do continue to think that the profit pool will likely grow with Aldi and Lidl profitabliity under pressure, two rivals likely in private-equity ownerships and an online strategic advantage.

Sainsbury was the second-largest decliner in the FTSE 100, with Just Eat Takeaway.com
JET,
-5.59%

sliding 5%.

The FTSE 100
UKX,
-0.18%

traded 0.1% lower to 7,118.20, sticking to a tight range ahead of the speech from Fed Chair Jerome Powell.

Basic resource plays including Anglo American
AAL,
+1.67%

and Glencore
GLEN,
+1.02%

rose.

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