(Bloomberg) J Sainsbury Plc may need a rights offering as margins shrink amid fierce competition among U.K. supermarket operators, according to Marshall Wace LLP, a U.K. hedge-fund firm that’s betting on a decline in the company’s shares.
“Sainsbury’s balance sheet leaves it in a precarious position,” Marshall Wace wrote in a letter to investors sent Wednesday and seen by Bloomberg News. The company, one of Europe’s biggest hedge funds, sees the “potential need for a rights issue if margins compress as we believe they will.” A Sainsbury spokeswoman declined to comment.
