It must be galling right now to be Sir Terry Leahy. In his modest office in Cheshunt, the Tesco supremo has watched as Justin King, sitting pretty in his Holborn haunt, is slobbered over by the private equity boys. They are

offering reportedly lavish sums to keep him on board as part of their mooted £11bn bids for Sainsbury's, and he is lauded by the media as the 'turnaround king'.

King has done a great job: he's ahead of target on his three-year plan and the share price has returned from the dead. But margins at Sainsbury's are still low - 2% or so versus Tesco's 6% - yet the P/E ratio is three times that of Tesco, and rising.

So why aren't the private equity boys eyeing Tesco? It owns much more land. And, based on Sainsbury's share price, Tesco's shares are seriously undervalued.

"Private equity players couldn't afford Tesco," you might say. You'd probably be right. But as I keep hearing about the ever-increasing size of these deals I wonder how much Tesco's share price would go up in the bidding process.