The grocery store market has changed drastically the last decade and more so the past three years, with discounters doubling in market share and others entering the market that could not have done so just a few years ago, said the CFO. One-time billionaire Crispin Odey and Pelham Capital also feature on the list of large Sainsbury's shorts.
He said: "I was looking through Sainsbury's this morning and there is a pretty large short position, I think I saw it at about 11 percent, the highest short of the food retailers that I saw".
"The most aggressive response by Morrisons would be a bid for Sainsbury's", Jefferies analyst James Grzinic said.
The deal, which was revealed on 28 April, will see Sainsbury's pay £3bn to Asda parent Walmart and 42% of the combined shares, valuing Asda at approximately £7.3bn. United Kingdom head of competition Nicole Kar and antitrust partner Simon Pritchard have also acted on the deal, which values Asda at £7.3bn.
According to Sainsbury's chief executive Mike Coupe, who will run the new business, both brands would be maintained. Walmart (which now owns Asda) will retain a 42% holding in the combination.
In the wake of the £12 billion deal between the two grocery giants, Mike Coupe was filmed by ITV News singing some of the musical theatre tune in between interviews.
Dipa Joshi, director at Assael Architecture, said: "The brownfield sites that don't survive the merger would be extremely well placed to provide new homes and communities, amid a well-documented housing crisis in the UK".More news: BJP Union Minister Offers Advice to Rahul Gandhi on Poll Prediction
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As one senior baking industry figure put it: "I am sure that, along with all suppliers, the comments of 10% savings will ring alarm bells in the baking industry, as it implies they believe that - as the number two and three retailers in the United Kingdom - they don't buy as well as possible".
"We believe the combination offers a unique and exciting opportunity that benefits customers and colleagues", said Walmart chief executive Doug McMillon.
"Those at the top of Sainsbury's and Asda should explain how they plan to merge these two supply chains fairly, and give reassurance that cost savings won't be achieved simply by milking their small suppliers for all they're worth".
"This merger would create a company (with about 29% market share) to rival Tesco (27% market share) but we would expect a number of store disposals should it be cleared (which is not guaranteed)", HSBC said. There is, however, a significant overlap in Northern Ireland. "This shows the risk of the merged entities shutting stores, at the behest of the CMA". Sainsbury's took over Argos in 2016 and has been integrating the catalogue retailer into its own stores.
The Qatar Investment Authority, now the largest shareholder in Sainsbury's with a 22 per cent stake, said it supported the deal.
Supermarkets Sainsbury's and Asda have agreed a potential merger.
Sainsbury's also reported its full-year results, showing a first rise in profit in four years and expressed confidence in meeting analysts' profit forecasts for 2018-19.