Private equity firm CVC was battling to keep its bid for Britain's J Sainsbury afloat yesterday, after its bidding partners pulled out and the food retailer's founding family rejected an improved £10.1 billion (€14.82 billion) offer, sources close to the matter said.

Shares in Sainsbury, Britain's third-biggest supermarket group, fell more than 5 per cent on speculation that CVC would be unable to raise the bid again on its own.

Sources familiar with the situation said buyout groups Texas Pacific and Blackstone had left the bidding team even before CVC had proposed a new offer of 582 pence a share in cash, up 3.6 per cent from its previous proposal. Kohlberg Kravis Roberts left the private equity consortium last week.

Sainsbury declined to comment, but a person close to its founding family - which owns about 18 per cent of the shares - reiterated that it would oppose opening the company's books for a bid of less than 600 pence a share. "What part of 'no' don't they understand?" the person said.

David Sainsbury, a former chairman of the company, is the family's biggest shareholder, with a 7.75 per cent stake. Newspapers have said other shareholders, such as property magnate Robert Tchenguiz, agreed with the family position. "The sticking point is the family," another source close to the situation said.

Sainsbury shares have risen about a quarter in value since February 2nd, when the CVC team announced its bid plans, on hopes of a takeover battle. Clothing and food retailer Marks & Spencer has said it would not rule out making a counterbid for Sainsbury, while sources close to the matter have said Britain's second-biggest grocer, Wal Mart-owned Asda, was looking at whether it could get a bid past competition regulators. - (Reuters)