Media Bites 31 August: Sainsbury’s, Morrisons, Asda, M&S, Mars
31 August 2021
​Erdinger Weissbräu expands low & no range with grapefruit-flavoured beer
31 August 2021

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Sainsbury’s is reportedly in “advanced discussions” to sell off its banking arm to US private equity firm Centerbridge.

Sky News on Saturday reported that the supermarket is nearing a deal, thought to be worth around £200m, for its banking arm a year after initiating a sales process for the division.

The deal is said to be “within weeks of a potential agreement”, although the report cautioned that the agreement “could still fall apart”.

Sky said Centerbridge is an experienced investor in the banking sector, with financial sector investments in Europe and North America.

The US PE firm previously backed lender Aldermore and and was part of a consortium in 2015 which unsuccessfully attempted to acquire Royal Bank of Scotland-owned Williams & Glyn, which was run by current Sainsbury’s Bank CEO Jim Brown.

Sky reported that Centerbridge plans to acquire Sainsbury’s banking business outright and will continue to use the supermarket’s brand under a licensing agreement.

Reports emerged in November last year that Sainsbury’s was mulling a sale of its banking arm amid low interest rates constraining its profitability.

The supermarket chain subsequently engaged investment bank UBS to run a formal sales process.

Sainsbury’s, which took complete ownership of the bank in 2013, stopped selling mortgages in 2019 amid intense competition and has stated it will not inject further capital into the business.

Sainsbury’s and Centerbridge both declined to comment.

Morning update

McColl’s Retail Group has raised a further £3m via its open shareholder offer, to add to the £30m it raised from the ‘firm placing’ of shares it conducted earlier in August to raise capital to fund the transformation of more stores to the Morrisons format.

It said this morning it received valid acceptances from qualifying shareholders for the open offer in respect of 9,273,646 shares, representing approximately 37% open offer shares available.

In addition, it received applications from qualifying shareholders under the ‘excess application facility’ in respect of 5,733,183 Open Offer Shares.

Therefore, a total of 15,006,829 open offer shares have been accepted, representing 60% of the offer total.

The company has therefore raised gross proceeds of approximately £3m through the open offer.

Elsewhere, Delivery Hero has announced a new peak of orders from its Korean subsidiary Woowa.

The operator of the largest online food delivery platform in South Korea, Woowa delivered 100 million orders in August 2021.

Delivery Hero said it is particularly proud of reaching this record as it is yet another proofpoint of the high potential of the Korean delivery market and underlines Woowa’s strong operational performance.

Niklas Östberg, CEO and Co-Founder of Delivery Hero, said: “We have always seen tremendous potential both in Woowa and the Korean market at large, and the growth of order numbers proves us right. We have had a fantastic start to the partnership with tremendous success in launching own delivery and a new multi-vertical user interface which improves customer experience.

“This has not only generated value for our customers but also riders, restaurants, local businesses and the full delivery ecosystem. Seeing Korea reaching these order levels further highlights how much growth potential we have in many of our international markets.”

Delivery Hero and Woowa have been heavily investing in ramping up own delivery in South Korea, and the share of OD orders already doubled to 8% in June compared to February with Seoul now reaching as high as 29%.

The company will continue to expand this service to new cities and aims at reaching an OD order volume of 15 million in December.

On the markets this morning, the FTSE 100 has started the week down 0.1% at 7,140pts.

Risers include FeverTree, up 1.9% to 2,248p, Just Eat Takeaway.com, up 1.7% to 6,513p and Nichols, up 1.4% to 1335.5p.

Fallers include McColl’s, down anther 3.1% to 20.2p, SSP Group, down 1.8% to 269p and Hotel Chocolat, down 1.8% to 376.3p.

This week in the City

Newsflow remains scarce as the City gradually comes back from the August holiday season this week.

Travel and high street retailer WH Smith is scheduled to issue a pre-close trading update tomorrow morning.

McColl’s will host an EGM tomorrow to approve its £33m equity placing.

Tomorrow evening will see the results of the latest FTSE quarter index review, with Morrisons set for a promotion back into the FTSE 100 – although its promotion is likely to be brief after the board accepted an offer from a Fortress Investments-led consortium and then a higher £7bn offer from Clayton, Dubilier & Rice.

Outside the UK, Pernod Ricard issues its full year earnings tomorrow morning.

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