Announcement of Due Diligence

Sainsbury(J) PLC
20 September 2007

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION INTO OR FROM
AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

20 September 2007

STATEMENT BY DELTA (TWO) LIMITED ('DELTA TWO') AND J SAINSBURY PLC ('SAINSBURY'S
' OR 'THE COMPANY') REGARDING A POSSIBLE OFFER FOR SAINSBURY'S

Delta Two and Sainsbury's are today jointly providing an update on their
discussions concerning the possibility of Delta Two making an offer to acquire
all of the issued and to be issued ordinary share capital of Sainsbury's which
it does not already own, at a price of 600 pence in cash per ordinary share.

Following extensive discussions between the parties concerning the key aspects
of Delta Two's proposal and, following the submission of a revised proposal by
Delta Two,  the Board of Sainsbury's has unanimously agreed that Delta Two may
undertake a limited period of confirmatory due diligence on the Company in order
to progress its proposal. There can, however, be no certainty that any offer for
Sainsbury's will be made.

The Qatar Investment Authority ('QIA') is the ultimate parent of Delta Two,
being the company through which the QIA holds its existing interests in
Sainsbury's.

The key features of Delta Two's revised proposal are:

-   An offer price of 600 pence in cash per Sainsbury's share

Delta Two has reconfirmed its proposed offer price of 600 pence per share in
cash.  This offer price would represent a multiple of 40.8 times (1) the
earnings per share of Sainsbury's for the fifty two weeks ended 24 March 2007.
Sainsbury's shareholders would also be entitled to receive an interim dividend
of 3.0 pence per share which the Board of Sainsbury's would intend to declare in
respect of the period ending 6 October 2007.

-   A £0.85 billion increase in offer funding by way of ordinary shares
and preference shares, which will result in a total of £4.85 billion in funding
by way of ordinary shares, preference shares and payment-in-kind notes

No part of this funding would represent a liability of the existing Sainsbury's
group.  The increase in funding by way of ordinary shares and preference shares,
which are guaranteed by the State of Qatar, leads to a reduction in debt funding
provided by third parties in comparison to Delta Two's original proposal
announced on 19 July 2007.

-   New commitment letters from Delta Two's financing banks in respect
of debt facilities totalling £9.6 billion

These facilities (provided by ABN Amro NV, Credit Suisse and Dresdner Kleinwort
Limited) together with the £4.85 billion of committed funding from ordinary
shares, preference shares and payment-in-kind notes would be used to fund the
offer, repay existing Sainsbury's debt and inter alia provide long term
financing for the Sainsbury's group following an acquisition of Sainsbury's by
Delta Two.

-   The appointment of a non-executive Chairman to the Board of Sainsbury's and 
enhanced reporting and disclosure standards

Tony Campbell, former Deputy Chief Executive of ASDA Group plc ('ASDA'), would
become non-executive Chairman of Sainsbury's following completion of any offer
by Delta Two. Delta Two intends that Sainsbury's would adopt the guidance in the
Walker Report relating to enhanced reporting and disclosure standards for
privately-owned companies.

-   Delta Two business plan and capital structure

Prior to reaching agreement on a process for due diligence, Delta Two and
Sainsbury's held extensive discussions on Delta Two's proposed capital structure
and its plans for the business, including the implications for stakeholders.

Delta Two's business plan is focused on growth, envisaging £3.5 billion of
capital investment over the next five years to fund new store expansion, the
continued refurbishment of existing stores, further development of Sainsbury's
non-food offering and continued investment in infrastructure.  Delta Two has
provided assurances that Sainsbury's will have operational flexibility to
compete in order to maintain and enhance customer goodwill. The strong
relationships Sainsbury's has with its suppliers would be maintained, as would
its support for the quality and diversity of food production in the UK.  Delta
Two shares Sainsbury's management's view that ownership of property is integral
to the long-term success of the business.  Accordingly, and in line with
management's current operational strategy, the retail business and Sainsbury's
property assets would remain under common ownership in the same corporate group.
In summary, under Delta Two's ownership, Sainsbury's would see significant
investment and further expansion and would remain a robust competitor in its
markets, even in challenging industry conditions.  Delta Two and the QIA would
expect to manage the capital structure flexibly in response to opportunities and
challenges encountered by the business.  In this regard, Delta Two and the QIA
will, where appropriate, support and develop the business through further equity
investment.

-   Delta Two has a high regard for Sainsbury's management and employees

Delta Two has a high regard for the management and employees of Sainsbury's and
attaches considerable importance to retaining their skills and expertise for the
benefit of the business in the future.  Delta Two intends to maintain the
existing cash benefits, and put in place new performance-based incentives for
management and employees.  In relation to the Executive Directors, details of
these arrangements will not be proposed until such time as any offer becomes
wholly unconditional.

-   Delta Two to work constructively with the trustees of Sainsbury's
pension schemes

Delta Two recognises the importance of ensuring that the Sainsbury's pension
schemes are appropriately funded, and intends to work constructively with the
Sainsbury's pension trustees to reach agreement on the appropriate level of
funding for the schemes.  Delta Two will approach the Sainsbury's pension
trustees imminently to commence detailed discussions.

-   Delta Two and the QIA

The QIA is the ultimate parent of Delta Two being the company through which the
QIA holds its existing interests in Sainsbury's.  The QIA was established in
June 2005 with the objective of developing, investing and managing Qatar's
reserve funds and other property assigned to it by Qatar's Supreme Council.  It
is a Qatar government-controlled, non-corporate entity which invests in local
and international markets as part of the Qatari government's strategy of
reducing the country's economic reliance on fossil fuels.  His Excellency Sheikh
Hamad Bin Jasim Bin Jabor Al-Thani, the Prime Minister of the State of Qatar, is
the Vice Chairman and CEO of the QIA.

The QIA has given appropriate assurances to the Board of Sainsbury's concerning
the ultimate ownership and control of Delta Two, including the nature of the
relationships between the QIA, Delta Two and Paul Taylor.  Delta Two intends
that Sainsbury's will adopt the guidance in the Walker Report relating to
enhanced reporting and disclosure standards for privately-owned companies.

Paul Taylor, Principal of Three Delta and Strategic Investment Adviser to Delta
Two in relation to the proposal, said:

'We have a high regard for the management and employees of Sainsbury's and we
are supportive of their operational strategy, including plans for substantial
investment in the Company.  We are very pleased to have reached agreement with
the Board on a process for due diligence. This is an important next step in our
progressing a possible offer for the Company.'


Sir Philip Hampton, Chairman of Sainsbury's, said:

'We have held extensive discussions with Delta Two over a number of weeks and
believe that their revised proposal is comprehensive and, if it results in an
offer, that offer would be recommendable to shareholders. The Board has
unanimously decided it is now appropriate to permit Delta Two to undertake
confirmatory due diligence.'

No decision has been made regarding any possible offer and accordingly there can
be no certainty that any offer for Sainsbury's will be made. A further
announcement may be made as and when appropriate.

Delta Two is being advised by Dresdner Kleinwort Limited and Credit Suisse
Securities (Europe) Limited.  Sainsbury's is being advised by UBS Investment
Bank and Morgan Stanley & Co. Limited.

Enquiries:

Joint financial advisers to Delta (Two) Limited:

Dresdner Kleinwort Limited                                                   Tel: [phone]
John McIntyre

Credit Suisse Securities (Europe) Limited                                    Tel: [phone]
David Livingstone

Public relations adviser to Delta (Two) Limited:
Financial Dynamics                                                           Tel: [phone]
Giles Sanderson
Jonathon Brill

J Sainsbury plc:
Elliot Jordan (Investor Relations)                                           Tel: [phone]
Pip Wood (Media)                                                             Tel: [phone]

Joint financial advisers and joint brokers to J Sainsbury plc:

UBS Investment Bank                                                          Tel: [phone]
Hew Glyn Davies

Morgan Stanley & Co. Limited                                                 Tel: [phone]
Gavin MacDonald

Public relations adviser to J Sainsbury plc:
Finsbury                                                                     Tel: [phone]
Mike Smith
Alex Pettifer

This announcement does not constitute, or form any part of, any offer for
securities.



Notes

(1)       Based on underlying basic earnings per share for Sainsbury's of 14.7
pence per share as extracted from the annual report and accounts of Sainsbury's
for the fifty two weeks ended 24 March 2007.


Notes

Tony Campbell Biography

Tony Campbell, is one of the UK's most experienced retail business executives
with over 20 years experience as a director of a FTSE company and a total of 35
years experience in retailing.  Starting as a trainee store manager, he worked
for Fine-Fare Supermarkets and later became Store Manager at Sainsbury's,
progressing to Stores Director of their Savacentre hypermarket division.

Tony Campbell joined ASDA in 1985 as Operations Director and was appointed to
the main board in 1987.  He was one of the key executives responsible for the
turnaround of ASDA in the 1990s, during which period he worked with Justin King,
the current CEO of Sainsbury's, in a number of senior roles.  In 1998 he was
appointed Deputy CEO, in which capacity he led the business alignment programme
following the acquisition of ASDA for £6.7 billion by Wal-Mart Stores, Inc. in
1999.

Since 2001 he has held a number of senior positions in the retail and leisure
sectors including Chairman of The Spirit Group and Senior Non-Executive Director
of First Choice Holidays plc.  He is currently Chairman of Hobbs Limited,
Chairman of T M Lewin and Sons Ltd. and Chairman of The White Company.

Dresdner Kleinwort Limited and Credit Suisse Securities (Europe) Limited, who
are authorised and regulated in the United Kingdom by the Financial Services
Authority, are acting as joint financial advisers to Delta Two and for no-one
else in connection with the contents of this announcement and will not be
responsible to anyone other than Delta Two for providing the protections
afforded to customers of Dresdner Kleinwort Limited and Credit Suisse Securities
(Europe) Limited, or for providing advice in relation to the contents of this
announcement or any matters referred to herein.

UBS Investment Bank and Morgan Stanley & Co. Limited are acting as joint
financial advisers and joint brokers to Sainsbury's, and no one else in
connection with the potential offer and the contents of this announcement and
will not be responsible to anyone other than Sainsbury's for providing the
protections afforded to the clients of UBS Investment Bank and Morgan Stanley &
Co. Limited, nor for providing advice in relation to the potential offer, the
contents of this announcement or any other matter referred to herein.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any
person is, or becomes, 'interested' (directly or indirectly) in 1% or more of
any class of 'relevant securities' of Sainsbury's, all 'dealings' in any
'relevant ' securities' of that company (including by means of an option in
respect of, or a derivative referenced to, any such 'relevant securities') must
be publicly disclosed by no later than 3.30pm (London time) on the London
business day following the date of the relevant transaction. This requirement
will continue until the date on which the offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or on which
the 'offer period' otherwise ends. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to acquire an
'interest' in 'relevant securities' of Sainsbury's, they will be deemed to be a
single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Sainsbury's by Delta (Two) Limited, the Qatar Investment
Authority, or Sainsbury's, or by any of their respective 'associates', must be
disclosed by no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk .

'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.






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