Hedge funds betting against Sainsbury's share price squeezed out of stock as Morrisons takeover heats up

By Neil Craven, Financial Mail on Sunday

Published: | Updated:

Hedge funds betting against Sainsbury's share price were squeezed out of the stock last week as the takeover of its rival Morrisons heated up. 

Short sellers – who hold contracts that allow them to benefit when the share price falls – have ditched their positions against the London-based chain. 

The number of shares held by short sellers dwindled to around six per cent – a third less than its six-month peak the previous week. 

Trollied: Short sellers have ditched their positions against Sainsbury's

Trollied: Short sellers have ditched their positions against Sainsbury's

Marshall Wace, owned by Sir Paul Marshall and Ian Wace, were among those in retreat. 

Short sellers in the stock have been buffeted by a rise in the share price from a low of £2.33 six months ago to £2.87 on Friday. 

Sainsbury's shareholder register is dominated by the Qatar Investment Authority and Czech businessman Daniel Kretinsky, who own around a quarter of the shares between them. 

Kretinsky – known as the Czech Sphinx for his imposing but inscrutable investment style – has built up a stake of nearly 10 per cent, meaning he has made around £100million from his punt on the firm.

The 45-year-old, who is also president and owner of top Czech football club Sparta Prague, is known for his shareholder activism but has so far insisted he merely sees Sainsbury's as 'an attractive investment opportunity'. 

Other major shareholders in the grocer include Vanguard, BlackRock and Schroders. 

Sainsbury's was a prime pandemic beneficiary and invested heavily in food delivery last year.

'Shorts' on supermarket Sainsbury's ditched as shares leap

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