Czech billionaire Kretinsky ups bet on retail with Sainsbury's stake

(Reuters) - Czech billionaire Daniel Kretinsky has built a 3.05% stake in J. Sainsbury SBRY.L to become the UK supermarket group's fourth-largest shareholder, expanding a portfolio of retail investments that also includes France's Casino and Germany's Metro.

FILE PHOTO: People are seen following social distancing rules as they queue outside a Sainsbury's supermarket in Durham, as the spread of the coronavirus disease (COVID-19) continues, Durham, Britain, April 8, 2020. REUTERS/Lee Smith

A regulatory filing on Thursday disclosed the stake held by Kretinsky’s VESA Equity Investment and sent Sainsbury’s shares more than 3% higher. At Wednesday’s closing price, a 3.05% stake in Sainsbury’s was worth about 125 million pounds ($162 million).

Kretinsky, who built one of Europe’s largest energy groups through more than a decade of deals, has been diversifying and scouring retail, media and other areas for investments.

“We view Sainsbury’s as an attractive investment opportunity for the long-run even against the backdrop of the highly competitive UK grocery market,” said VESA’s investment director Branislav Miskovic.

“Sainsbury’s is a strong traditional brand with good locations concentrated in the South East of England, including London and an attractive convenience as well as online food delivery proposition for its customers,” he said in a statement.

VESA, controlled by Kretinsky and partner Patrik Tkac, raised its stake in French retailer Casino CASP.PA in March to 6.88%.

Another vehicle owned by Kretinsky, EP Global Commerce, is a major shareholder in German wholesaler Metro B4B.DE. It said on Sunday it was launching an offer to raise its stake in the firm from the current 19.99%.

VESA's portfolio also includes stakes in U.S. retailer Foot Locker Inc FL.N, data from Refinitiv Eikon shows. It took a 5% stake in department store chain Macy's Inc M.N in May but reduced it shortly after and now holds 0.67%.

Kretinsky, the biggest shareholder in Britain's Royal Mail RMG.L through VESA, has increased its investment in the postal company over the past few months, from around 4% in April to 13.1% as of July.

($1 = 0.7724 pounds)

Reporting by Yadarisa Shabong in Bengaluru and Jan Lopatka in Prague; Editing by Shinjini Ganguli and Mark Potter