April 10, 2019 / 8:11 AM / 6 months ago

Metro considers paying money to shed hypermarkets: Handelsblatt

BERLIN (Reuters) - German retailer Metro is considering effectively paying more than 200 million euros ($225 million) to divest its loss-making Real hypermarkets, Handelsblatt business paper reported on Wednesday.

German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf, Germany March 02, 2018. REUTERS/Thilo Schmuelgen

The Duesseldorf-based company is in talks to sell Real to peer Markant in a deal that would see the properties of the hypermarkets chain go to a different investor, Handelsblatt added.

Markant would pay 99 million euros for the business, but Metro would inject 300 million euros of fresh equity into Real ahead of a deal, the paper said.

Separately, talks with two investors on the business including the properties were ongoing, the paper said.

Metro shares were down as much as 1.5 percent but later turned positive and were up 0.4 percent at 0742 GMT.

Metro declined to comment on the contents of the discussions, but said talks with different parties were ongoing.

Markant declined to comment.

Last month, Metro Chief Executive Olaf Koch said the company was in talks with about five parties interested in the chain, which has annual sales of more than 7 billion euros.

German daily Boersen-Zeitung on Wednesday reported separately that a consortium comprising ECE, Morgan Stanley and Redos had dropped out of the auction for the properties, while retail property investor X+Bricks remained interested.

Real runs 279 hypermarkets, of which 65 are owned by the group itself. They boast shop floors of up to 15,000 square meters (160,000 square feet).

Industry bankers had predicted Metro might have to effectively pay a buyer to take the chain off its hands.

Koch told journalists in February he expected a positive price for Real due to its real estate portfolio and ecommerce business.

Reporting by Thomas Seythal; Additional reporting by Arno Schuetze in Frankfurt and Anneli Palmen and Matthias Inverardi in Duesseldorf; Editing by David Holmes/Keith Weir

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