High demand and takeover speculation has kept Sainsbury’s stock price at its consistently-highest level in almost three years.
Shares have hovered around the 300p mark for the past couple of months, something that has not been seen since December 2018.
They have steadily climbed since September 2020 as supermarkets rode a Covid-fuelled surge in demand.
Although Sainsbury’s grocery sales inched up just 0.8 per cent in its most recent trading update, this was still an 11.3 per cent rise on Q1 2019.
Murmurings that the retailer could be the next private equity target, after Morrisons and Asda were snatched from public listings within a year, has also boosted share prices.
Possible buyers could include the buyout firms Fortress and Apollo, who have both come off worst in a bid for a supermarket.
It was reported in August that Apollo had Sainsbury’s in its sights, although no offer has been made.
The group was seen as a frontrunner in the Asda takeover, but it eventually went to the Issa brothers and TDR Capital.
Fortress, who was outbid for Morrisons in auction this month, has not ruled out further supermarket overtures.
“The UK remains a very attractive investment environment from many perspectives,” managing partner Joshua Pack said.
“We will continue to explore opportunities to help strong management teams grow their businesses and create long-term value.”
However, Bernstein analyst William Woods said a Sainsbury’s buyout was unlikely given its cash flow challenges and management strategy.
There are also the “complications” of its bank and Argos branches, he added.