July 20 (Bloomberg) -- A Qatari investment fund's bid for J Sainsbury Plc should be blocked by the U.K. government because it isn't in the nation's interests, according to a union that represents 20,000 workers at the London-based supermarket chain.

``How on earth can it be in Britain's interest to allow Sainsbury's to become the nationalized property of a Gulf state?'' said Brian Revell, national organizer for food and agriculture at the T&G, a section of global workers union Unite.

Delta (Two) Ltd. said yesterday it submitted an offer to the Sainsbury board that valued the British retailer at about 10.6 billion pounds ($21.7 billion), or 600 pence a share. It already owns 25 percent of Sainsbury. Unions have previously complained that leveraged buyouts should be more closely monitored by the U.K. government and have asked for potential buyers to disclose more information regarding their operations.

The T&G union represents more than 10 percent of Sainsbury's store and distribution center staff. Delta (Two) may seek to sell Sainsbury's property assets, which would increase rental payments and reduce its ability to compete with Tesco Plc and Wal-Mart Stores Inc's U.K. Asda chain, Revell said in the statement.

Analysts have speculated the retailer's 8.6 billion pounds of property is the main attraction for both Delta and CVC Capital Partners Ltd., whose bid failed this year. Delta Chief Executive Officer Paul Taylor said yesterday the proposed offer was ``focused on growth, not retrenchment,'' with a commitment to ``continue to improve Sainsbury's market position.''

Chris Gower, an analyst at MF Global in London, said it was notable that Delta's statement didn't mention Sainsbury's property assets, adding that the fund may have been seeking to ease concerns of a significant sale and leaseback transaction.

To contact the reporter on this story: Neil Craven in London at ncraven1@bloomberg.net.

Last Updated: July 20, 2007 05:01 EDT