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Metro Aims For Deal To Sell Real Hypermarkets In April Or May

Published on Mar 9 2019 2:30 PM in Retail tagged: Trending Posts / Germany / Metro / Real Hypermarket

Metro Aims For Deal To Sell Real Hypermarkets In April Or May

German wholesaler Metro is aiming to sign a deal to sell its loss-making Real hypermarkets chain in April or May, chief executive Olaf Koch said.

Metro is in talks with about five parties interested in the chain, which has annual sales of more than €7 billion ($7.9 billion), he told journalists late Thursday.

'Potential Buyers'

"We only talk to potential buyers who want to take on everything," Koch said, adding, "You can never rule out bidders forming consortiums."

People familiar with the matter said Kaufland owner Schwarz group had tied up with retail property investor X+Bricks AG led by former Corestate chief executive Sascha Wilhelm.

Separately, shopping mall operator ECE is working with Morgan Stanley Real Estate (MSRE) on a possible bid, the people said.

"We are following the discussions about Real's future very closely. However, we are not an operative retailer and do not want to become one," ECE said in a statement.

It remained unclear whether the ECE/MSRE consortium was working with a hypermarket group as an additional partner.

Schwarz, X-Bricks and MSRE declined to comment. Metro also declined to comment on interested parties.

Hampering Competition

Germany's antitrust watchdog is expected to view with concern a takeover of Real by one of the other large hypermarket groups as it could be seen as hampering competition.

Industry bankers have predicted Metro might have to effectively pay a buyer to take the chain off its hands.

Real runs 279 hypermarkets, of which 65 are owned by the group itself. One person close to the matter has estimated the properties to be worth €750-900 million, to be balanced against the expected negative value of the operating company.

Koch, who is being advised by JP Morgan and Bank of America on the transaction, has said he expects to achieve a positive purchase price on the deal.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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