Sainsbury’s ends talks over sale of bank

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J Sainsbury PLC (LSE:SBRY) ended discussions over the sale of its bank business, saying the sums discussed weren’t sufficient to warrant its disposal.


The supermarket revealed last November it had received some enquiries about buying the bank.


In a statement, the FTSE 100 group added that while the expressions of interest were worth exploring, they did not offer better value for shareholders than retaining Sainsbury’s Bank.


“Accordingly, all such discussions have now ended.”


“We continue to make progress strengthening and simplifying our Financial Services business in line with our strategy and we remain comfortable with consensus profit forecasts for the division.”


Reports in August suggested Sainsbury’s had restarted talks with US private equity group Centerbridge over a deal worth around GBP200mln.


At the time, analysts said a sale would make sense as it would give chief executive Simon Roberts more freedom to focus on the development of the food offer and completion of the re-engineering of Argos.


“It also makes strategic sense to exit the UK financial services market where it is a clearly sub-scale bank,” said Clive Black at Shore Capital.


Consensus forecasts for underlying operating profit of Sainsbury’s Financial Services arm are: FY21/22 GBP26mln, FY22/23 GBP43mln, FY23/24 GBP49mln.

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