Sainsbury acquires 21 supermarkets in £431m deal
The deal is expected to complete on 17 March 2023 for a total consideration of £4309m (excluding costs) which will be paid in three tranches
Sainsbury has announced the purchase of 21 supermarkets in a £431.5m deal from Supermarket Income REIT.
In addition to the remaining 49% it already owned, the supermarket purchased Supermarket Income REIT’s remaining 51% share of the stores in the Highbury and Dragon investment vehicles.
The deal will result in Sainsbury’s acquiring the freehold of 21 stores in the Highbury and Dragon investment vehicles which were previously rented by Sainsbury as part of the deal in 2022.
There are five other stores that will be sold by Sainsbury’s. However, Supermarket Income REIT could purchase four of them for a sum of £33.2m
It is expected that the one remaining store will be sold at vacant possession value.
The deal is expected to complete on 17 March 2023 for a total consideration of £430.9m (excluding costs) which will be paid in three tranches.
£279.3m will be paid on 17 March 2023 and £116.9m will be paid on 10 July 2023.
The third tranche of £34.7m is conditional on the sale of the remaining five stores by Sainsbury’s.
Additionally, Sainsbury’s will fully fund the Highbury and Dragon bond redemptions of £170.5m on 20 March 2023 and £130.4m on 13 July 2023 respectively.
The total consideration and Highbury and Dragon bond redemptions will be funded by utilising the Group’s cash resources and also by drawing under a committed unsecured term facility.
All of this added out to a £431.5m total value for the assets that were purchased..
The retailer said that the entities acquired in the Transaction generated aggregate profits before tax of £110.4m in their most recent respective financial years.
