Sainsbury signs up investment banks

STRUGGLING supermarkets group Sainsbury's was today reported to have lined up a heavyweight team of investment banks to bolster its defences against a possible bid.

The Wall Street Journal said the group has hired Morgan Stanley, which played a key role in defending Marks & Spencer against Philip Green's £9.1bn approach earlier this year, and also Swiss bank UBS, which is its house broker.

In recent deals, such as the sale of US operation Shaw's Supermarkets, Sainsbury's has used the American firm Goldman Sachs.

A Sainsbury's spokeswoman declined to comment on the Journal report, other than to say: 'There has been no change.' However, Sainsbury's shares gained 5 1/2p to 264 1/2p today as takeover talk intensified. Any bidder would need the support of the founding Sainsbury family, which controls about 36% of the shares.

Potential bidders are thought to include financier George Magan, Post Office chief Allan Leighton and Tory MP Archie Norman.