Costcutter owner Bestway takes near £200m stake in Sainsbury’s

Bestway, the owner of the Costcutter chain, has taken a near £200m stake in Sainsbury’s and said it could seek to increase its stake further.

The privately owned Bestway, which is one of the UK’s largest grocery wholesalers and also owns the country’s third largest pharmacy chain and more than 2,700 convenience stores under the Costcutter and Best-one brands, has bought almost 81m shares, giving it a 3.45% stake in the UK’s second largest supermarket chain.

“Bestway Group intends to hold its shares in Sainsbury’s for investment purposes and looks forward to supporting the executive management team,” the company said. “Bestway Group may look to make further market purchases of Sainsbury’s shares from time to time, subject to availability and price.”

Related: Lloyds Pharmacy to close all 237 Sainsbury’s outlets

The move will result in the company, the seventh largest privately held business in the UK, with an annual turnover of £4.5bn, becoming the sixth largest shareholder in Sainsbury’s.

Bestway said it is not considering making a takeover bid for Sainsbury’s – a statement that bars it from such a move for six months, unless a rival bid emerges, under Takeover Panel rules.

Maureen Hinton, an independent retail analyst, said Bestway’s stake could give it leverage in potential negotiations over the future of pharmacy outlets in Sainsbury’s after the supermarket chain’s current partner announced plans to close all 237 outlets.

“[Bestway’s] Well Pharmacy business would be a possible replacement for the Lloyds pharmacy exit,” she said in a tweet.

Clive Black, an analyst at Shore Capital, said it was not clear if Bestway had “the aspirations or the resources” to bid for Sainsbury’s or whether, as a major grocery wholesaler and pharmacy business, it wanted to “collaborate with Sainsbury’s from a trading perspective.”

Sainsbury’s already has two major shareholders on its register who might be interested in backing a privatisation – the Qatar Investment Authority, which owns just over 14% of the shares, and the billionaire Daniel Křetínský, known as the “Czech Sphinx”, who holds about 10%. Any deal would need their blessing.

Bestway did not disclose how much it paid for the stake. However, at Sainsbury’s closing price on Thursday of 239.4p, the stake was valued at £193m.

Shares in Sainsbury’s rose 4.5% on Friday to 250p, making it the top riser on the FTSE 100.

“We note the announcement made this morning by Bestway Group stating that it is not considering an offer for the company,” Sainsbury’s said. “We will engage with Bestway Group in line with our normal interactions with shareholders.”

Bestway, which was founded in 1976 and is chaired by the billionaire Sir Anwar Pervez, is one of Britain’s biggest food wholesalers, serving thousands of retailers.

It bought the Well pharmacy chain from the Co-op in 2014 and has 760 outlets. It also owns one of Pakistan’s largest banks and is that country’s second biggest cement manufacturer.