Sainsbury's Bank has announced it has become a 50-50 joint venture with high street bank HBOS after the supermarket bank sold five per cent of its shareholding for £21 million.
The sale of the shares will give rise to a profit of around £10 million, which will be used for general business purposes.
HBOS and Sainsbury's Bank will now have "equal control and input at shareholder and board level".
Commenting on the venture, Sainsbury's chief financial officer Darren Shapland said: "The sale of our five per cent for £21 million demonstrates the value of the bank and a 50-50 structure reflects the continued commitment of both shareholders."
Retail chief executive of HBOS Benny Higgins said: "Sainsbury's Bank has strong customer loyalty. The business has demonstrated it can acquire and retain customers very effectively. There is significant potential to grow the business. We aim to do just that."
The news comes after reports that Sainsbury has been eyed for takeover by equity firms CVC Capital Partners (CVC), Kohlberg Kravis Roberts (KKR) and the Blackstone Group, causing share prices to rocket. Recent rumours have also suggested that retail giant Marks and Spencer may also be considering making a bid for the UK's third-largest supermarket chain.
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