(Adds detail, background)
LONDON May 26 Sainsbury's, Britain's
second largest supermarket group, is in the early stages of
examining a takeover bid for wholesaler Palmer & Harvey (P&H),
Sky News reported.
P&H, owned by its current and former employees, distributes
tobacco, alcohol, chilled and frozen products to about 90,000
retail outlets from a fleet of over 1,300 vehicles. It has an
annual turnover of more than 4 billion pounds ($5.1 billion).
P&H is a major distributor to Tesco, Britain's
biggest retailer, which in January agreed a 3.7 billion pound
takeover of wholesaler rival Booker - a deal that faces
a lengthy competition probe.
The Sky News report cited unspecified sources as saying that
while Sainsbury's, which is a customer of P&H, was exploring a
bid there was no certainty it would proceed with an offer.
A spokeswoman for Sainsbury's declined to comment.
P&H said in a statement: "We do not comment on market
speculation. We have recently completed a successful
refinancing, and as usual we continue to have positive
discussion with our trading partners about building and
extending our relationships."
Analysts were sceptical on the chances of a bid
materialising from Sainsbury's, noting the need for the April
refinancing, and the fact that the supermarket group is still in
the early stages of integrating last September's 1.1 billion
pounds purchase of Argos-owner Home Retail.
Shares in Sainsbury's were up 1.2 percent at 282.2 pence at
1315 GMT, valuing the business at 6.2 billion pounds.
($1 = 0.7780 pounds)
(Reporting by James Davey; Editing by Paul Sandle and Keith