Sainsbury: Price check

Polygon’s decision to build a 1.5% stake in J Sainsbury suggests it’s betting on a buy-out of the UK supermarket group. The UK hedge fund has not said why it bought the stake. But as a straight risk arbitrage play it makes sense. According to a breakingviews calculation, a buyout could stack up at 550p - 7.5% above the current share price. Lev-eraged, that bet could yield Polygon a juicy annualised return. True, a bid of 550p would value Sainsbury’s at £11bn including debt - a whopping 20 times...