Sainsbury’s deploys voice picking

UK retail-and-distribution-sector IT company VoiteQ announced earlier this week the implementation at Sainsbury’s of a voice picking solution based on technologies from VoiteQ and its partner Vocollect.

At three of Sainsbury’s distribution centres, the existing warehouse management system has been interfaced with Vocollect Talkman devices using VoiteQ’s Voiceman middleware.

The Talkman is a wearable voice computer with a headset and microphone and a wireless network connection. No longer needing to use paper-based pick lists to determine the items to be picked and prepared for dispatch, the picker now receives spoken instructions providing the required details (location, item, quantity). The picker can then respond vocally with the verification of the product and quantity he’s picked.

Despite only recently implementing voice we have already seen significant benefits – accuracy has improved by over 1% to 99.99% and productivity is anticipated to increase by the end of 2008. We have made a significant investment in this new system, but believe with this increase in efficiency we will quickly attain our return on investment.
Nick Symmons, Head of Supply Chain and Convenience Systems, Sainsbury’s.

Sainsbury’s bidder confirms proposal… of 600p-a-share

The details of the Delta Two proposal are starting to emerge. Not that J Sainsbury is saying anything further yet, but Delta Two released a statement late yesterday afternoon.

The most obvious detail is the price per share, below expectations set by analysts and the media:

Delta Two confirms that a comprehensive and detailed proposal was delivered to the Board of Sainsbury yesterday morning.

The proposal concerns the possibility of Delta Two making an offer to acquire the balance of the ordinary share capital of Sainsbury at a price of 600 pence in cash per share. This is in addition to the 7.35 pence cash dividend to be received by shareholders of Sainsbury on Friday 20th July 2007.

Next up, a confirmation of the proposed approach to funding which, as speculated in the media, involves a significant amount of borrowing:

If made, the offer would be funded by an investment of £4.6 billion in the form of equity and subordinated PIK shares and notes, and debt finance of £6 billion provided by a banking syndicate.

The statement also goes some way to set the tone for how Delta Two intends to pilot the retailer:

The proposal also envisages an investment of some £3.5 billion over the next five years to fund new store expansion, further store refurbishment and the development of Sainsbury’s non-food offering.

[…]

Paul Taylor, Principal of Three Delta, which is the strategic investment adviser to Delta Two in relation to this investment, said:

‘Our proposal is focused on growth, not retrenchment. It is backed by a shareholder with the resources and commitment to continue to improve Sainsbury’s market position in the UK with its reputation for quality and innovative food at competitive prices.’

Now of course an actual offer may or may not materialise, but it does seem clear that Delta Two intend to go the distance. It seems probable that the terms released today will be further negotiated and I would expect the actual offer price-per-share to be higher, and possibly a more palatable funding proposition tabled.

Robert Peston, BBC business editor, reckons Delta Two has a lot more cash available than they have so far put on the table, and although I’ve so far not found any evidence that Robert’s statement is actually based on fact, it certainly seems improbable that Delta Two would be unaware of the problems raised with CVC’s similarly “highly leveraged” takeover funding proposal earlier this year. A successful acquisition in such conditions is unlikely without an accompanying (and substantial) upfront contribution to the J Sainsbury pension scheme.

Some background on Qatari foreign investment can be found on the BBC site.

Qatar shopping for Sainsbury’s

J Sainsbury plc faces for the second time this year a takeover bid, this time from its largest shareholder, the Qatari Royal family.

The previous bid, from a private equity consortium led by CVC, offered a low 582p a share, but the Sainsbury family was not keen and sunk the proposal. A family member reportedly said any bid below 600p a share was a non-starter.

Now Delta Two, the Qatari’s investment group, is apparently prepared to offer 610p a share. Sainsbury’s confirmed in a brief statement this morning that it has received a preliminary bid approach from Delta Two and that it would make a further announcement in due course.

Delta Two upped its stake in the supermarket giant last month from 18% to 25%, and according to the Financial Times, property investor Paul Taylor – who manages Delta Two – flew Sainsbury family members out to Sardinia last week to informally open discussion on the offer. A formal approach to Sainsbury’s chairman Philip Hampton is expected to be made by the end of the week.

While it seems unlikely that the Sainsbury family, who own around 18% of the company, will be supportive of Delta Two’s offer, the board at J Sainsbury would be unwise to let this slip away.

I would expect within a week a confirmation from Sainsbury’s that they are opening the books to Delta Two to kick off the due diligence process.

UPDATE Richard Fletcher at the Telegraph comments on the diminished ability of the Sainsbury family to actually block the Delta Two approach. Worth a read.

UPDATE BBC business editor Robert Peston comments on Delta Two’s financing plans. Despite significant cash at their disposal, Delta Two will borrow to fund some 2/3 of the deal. See Robert’s blog for more on the consequences of this approach.

Holy service levels, Batman!

Thought this was cute: eyedropper.co.uk reports on the original way in which “bad” suppliers are named-and-shamed at Sainsbury’s head office – their names are displayed in reception on a list held by a full-size cardboard cut-out Joker (yes the famous Batman villain).

Presumably the lists are established based on measured service levels (stock availability, delivery on-time-in-full, etc.) – those suppliers having the most problems meeting agreed service levels find themselves on the Joker’s list. Although I suppose the suppliers cited are going to be more concerned about possible lost orders, and any penalty invoices headed their way, than about a little good-humoured infamy in Sainsbury’s reception hall.

Oh and there’s a supplier hero list on display as well, held aloft by the mighty Batman himself.

Eyedropper’s post is here, and he has some more photos on flickr here.