Financial News

LONDON (ShareCast) - J Sainsbury has raised £242m from a placing of 78.1m shares at 310p each just hours after announcing plans to speed up growth.

Britain's third-largest supermarket had wanted £445m from a placing and offering of convertible bonds to take advantage of the weak property market.

It expected to get £255m from the placing being run by Morgan Stanley (NYSE: MS - news) and UBS (Virt-X: UBSN.VX - news) and the remaining £190m from the offer of convertible bonds due 2014.

Sainsbury (LSE: SBRY.L - news) 's wants to increase its planned gross space growth over the next two years from 10% to 15%, adding 2.5 million sq ft of additional selling space by March 2011.

"The fund raising...will provide us with the financial flexibility to take advantage of current opportunities to grow our business further and faster," said chief executive Justin King.

"We can speed up our growth in areas of lower market share, maintain the strength of our balance sheet and invest in the long-term growth of the business."

In a separate statement, the retailer reported a 7.8% hike in like-for-like sales excluding fuel and VAT for the 12 weeks to 13 June.

That beat arch rival Tesco (LSE: TSCO.L - news) , which yesterday posted a 4.3% increase in same store sales for the 13 weeks to the end of May.

Total sales for first quarter were up 3.2%, or 7.6% excluding fuel, while like-for-like sales for the period rose 2.5% and 7% respectively.

Cost conscious shoppers snapped up the store's 'basics' range, with sales up more than 50% year-on-year. There was also a record quarter for its TU clothing range. Sainsbury's is buying another nine stores from the Co-op for a total of £29m. It paid £83m for 24 Co-op stores in March.