Asda, the UK supermarket chain owned by Wal-Mart, could sell its property development arm, Gazeley, in a deal that could be worth up to £400 million ($802 million; €523 million).
A spokesperson for Gazeley told PERE the company was exploring all options regarding its future direction. “One of them might be the sale of the business,” she said. Representatives from Asda were unavailable for comment.
However a report in the Financial Times said Asda and its parent company, Wal-Mart, were keen to focus on its core operation. “This is not a core business for us,” said Andy Bond, president and chief executive of Asda, in the report. “We have previously had several unsolicited approaches for Gazeley and have now decided to review our strategic options, which might include a sale of the business.”
US industrial developer ProLogis was linked with a bid for Gazeley two years ago. ProLogis declined to comment to PERE on whether they would consider another bid.
Much of the value of Gazeley, which acts as a standalone company but provides Wal-Mart and Asda with distribution and storage warehouses, will be its undeveloped land bank. Gazeley, formed in 1987, has more than 20 sites in the UK alone and more across continental Europe and Asia.
Asda was bought out by US retailer Wal-Mart in 1999 and is currently the second largest chain in the UK after Tesco, with 16.8 percent of the grocery market share against Tesco’s 31.4 percent and Sainsbury’s 16.5 percent.