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Sainsbury's Ends Talks On Selling Banking Operation

Published on Oct 25 2021 5:50 AM in Retail tagged: Trending Posts / Barclays / Sainsbury / COVID-19

Sainsbury's Ends Talks On Selling Banking Operation

Sainsbury's said on Friday it had ended talks about selling its banking operation after concluding that approaches it received in November 2020 did not offer good value for shareholders. "Whilst th...

Sainsbury's said on Friday it had ended talks about selling its banking operation after concluding that approaches it received in November 2020 did not offer good value for shareholders.

"Whilst the Board of Sainsbury's believe that it was in the best interests of shareholders to explore these expressions of interest, it has concluded that these do not offer better value for shareholders than will be realised through retaining Sainsbury's Bank," it said.

Sainsbury's, Britain's second-biggest grocer, started exploring the sale of the bank a year ago as ultra-low interest rates and COVID-19 disruption increased pressures on the business.

British Banks 

British banks including Barclays, Lloyds Banking Group and Natwest were among possible suitors, a source familiar with the matter said in November last year.

Sainsbury's said it was making progress in simplifying the business, which it launched in 1997.

It added it was comfortable with consensus profit forecasts for the division, which stand at £26 million ($35.9 million) for the current financial year.

Higher Stock 

On the 4 October, shares in British supermarket group rose as much as 3.7%  on hopes SoftBank's Fortress Investment, which lost out in the auction for Morrisons, may turn its attention to an even bigger player in UK grocery.

Sainsbury's stock was up 4.2 pence at 288.9 pence at 0858 GMT, valuing the business at £6.7 billion ($9.1 billion).

Bidding War

Fortress was defeated in Saturday's shootout for Morrisons, Britain's No. 4 supermarket group, bidding 286 pence a share - a penny less than rival Clayton, Dubilier & Rice.

However, managing partner Joshua A Pack signalled Fortress remained interested in UK assets.

News by Reuters edited by Donna Ahern Checkout. For more Retail stories click here. Click subscribe to sign up for the Checkout print edition.

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