Metro aims for deal to sell Real hypermarkets in April/May (updated)

Corestate Capital Holding SA

08/03/2019 15:18

(Adds sources, background)
    By Matthias Inverardi and Arno Schuetze
    DUESSELDORF/FRANKFURT, March 8 (Reuters) - German wholesaler
Metro  B4B.DE  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 euros ($7.9
billion), he told journalists late Thursday.
    "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  CCAG.DE  Chief Executive Sascha Wilhelm. 
    Separately, shopping mall operator ECE is working with
Morgan Stanley  MS.N  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.
    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 euros, 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. 
    ($1 = 0.8917 euros)

 (Editing by Emelia Sithoe-Matarise and Mark Potter)
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Messaging: arno.schuetze.reuters.com@reuters.net))