Sainsbury’s has announced that its plans to sell 18 of its supermarket stores to real estate investor, LXi REIT will no longer be going ahead.
LXi REIT revealed this morning (26 September), that it would not be proceeding with the share issue which would have part-funded its transaction of the 18 stores, due to the current volatility of the stock market.
While Sainsbury’s originally planned to use the £500 million transaction to part-fund its own purchase of 21 freehold supermarkets from the Highbury and Dragon portfolios, it has said the decision not to proceed will have no impact on its financial guidance.
Despite the discussions which were first announced last week, both parties stressed that there was no certainty the transaction or the associated share issue would take place.
According to a property industry source, the real estate investor has a market value of about £2.5 billion and if it were the fund the acquisition, it would be set back with an unspecified amount of debt.
Following the transaction collapse, the Big 4 grocer has confirmed that its purchase of the 21 Highbury and Dragon stores will continue to go ahead using alternative financing options.
The purchase is set to be complete within the first half of the 2024 financial year.
This news comes as Sainsbury’s has announced it will be opening a walk-in freezer store which will be giving away a range of free frozen grocery products in a bid to reduce food waste.
