Several reports suggest that Morrisons has been approached by an interested buyer for 25 of its stores in a deal that could be worth up to £1 billion.
The Bradford-based supermarket chain has refused to confirm the speculation, having earlier this year announced that it would consider release some of the value in its property portfolio to pay off debt and return the profits to shareholders.
The sale of property to unlock funds is becoming something of a retail trend. The decision to sell off sites and lease them back has been considered by several supermarkets including Sainsbury’s.
Analyst JP Morgan commented: "This perhaps explains the positive share price reaction over the last couple of days. We think the market was also somewhat sceptical the deal would ever happen given the cooling of the property market and Ken Morrison’s defence of the freehold-only model at the agm. In terms of timing, we wouldn't expect anything until autumn.
“The deal is likely to be in the Tesco mould. We would expect sale into a 50:50 jv with control of properties retained. There might be some provision to enable repurchase of the freeholds at a market price at some specified point in the future. It is also quite likely that some sort of cap (and also collar) is put on annual rental increases for the Morrison stores within the deal.”
