26th Sep 2022 09:26
(Alliance News) - LXi REIT PLC on Monday said it will not proceed with the purchase of 18 stores owned by J Sainsbury PLC, citing "current stock-market volatility".
Part of the funding for the GBP500 million purchase would have come from LXi issuing new shares.
However, LXi's stock price has fallen 13% in the past five days and were down 1.7% on Monday morning to 125.40 pence per share.
Sainsbury's shares traded 0.3% higher at 193.50 pence each in London.
Last week Wednesday, LXi and Sainsbury's announced the transaction. LXi explained that the stores, which are located in the south of England, would have represented a net initial yield of around 5.0% and that they would have been let back to Sainsbury's Supermarkets Ltd.
The cancelled sale has no impact on Sainsbury's financial guidance, the supermarket chain said. It noted that on Wednesday it said it would have used proceeds of the sale for the purchase of 21 freehold Sainsbury's supermarkets from the Highbury and Dragon portfolios.
Sainsbury's on Monday explained that it will use alternative funding options to complete the purchase and that the acquisitions are still expected to complete in the first half of its financial year to March 2024.
By Tom Budszus; [email protected]
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