Sainsbury’s has sold its 281-store pharmacy business to Celesio, the owner of the Lloyds Pharmacy chain, for £125m.
Under the deal, Lloyds will rent out and run Sainsbury’s 277 in-store pharmacies and take over four located in hospitals. Up to 2,500 Sainsbury’s pharmacy staff will transfer to Lloyds.
Mike Coupe, chief executive of Sainsbury’s, said: “Working together with a specialist operator like Lloyds Pharmacy will enable us to grow and extend our pharmacy services to customers, whilst realising value for shareholders today from the pharmacy business we have grown organically over the last 20 years.”
Analysts said the cash from the deal would further strengthen Sainsbury’s balance sheet after the retailer raised £500m through bond issues last week. It told analysts that roughly half the bond funds would be used to pay down its pension deficit while the other half would be used to “get on the front foot with corporate plans”.
Bruno Monteyne, an analyst at Bernstein Research, said: “These funds are not immediately necessary. The market was not waiting for this, but it is reassuring if somewhat unexpected.”
Without major pressure from investors for cash-raising measures, Sainsbury’s sudden flurry of fundraising activity is likely to heighten speculation that the retailer is looking to buy out a chain or batch of stores to help expand either its convenience store brand, Sainsbury’s Local, or its nascent discounter joint venture, Netto.
Sainsbury’s plans to reach a total of 15 Netto stores this year, including the buy-out of three Co-op stores in Leeds, Hull and Doncaster, which is currently being reviewed by the competition regulator.
http://www.theguardian.com/business/2015/jul/29/sainsburys-sells-pharmacy-business-celesio-125m
Under the deal, Lloyds will rent out and run Sainsbury’s 277 in-store pharmacies and take over four located in hospitals. Up to 2,500 Sainsbury’s pharmacy staff will transfer to Lloyds.
Mike Coupe, chief executive of Sainsbury’s, said: “Working together with a specialist operator like Lloyds Pharmacy will enable us to grow and extend our pharmacy services to customers, whilst realising value for shareholders today from the pharmacy business we have grown organically over the last 20 years.”
Analysts said the cash from the deal would further strengthen Sainsbury’s balance sheet after the retailer raised £500m through bond issues last week. It told analysts that roughly half the bond funds would be used to pay down its pension deficit while the other half would be used to “get on the front foot with corporate plans”.
Bruno Monteyne, an analyst at Bernstein Research, said: “These funds are not immediately necessary. The market was not waiting for this, but it is reassuring if somewhat unexpected.”
Without major pressure from investors for cash-raising measures, Sainsbury’s sudden flurry of fundraising activity is likely to heighten speculation that the retailer is looking to buy out a chain or batch of stores to help expand either its convenience store brand, Sainsbury’s Local, or its nascent discounter joint venture, Netto.
Sainsbury’s plans to reach a total of 15 Netto stores this year, including the buy-out of three Co-op stores in Leeds, Hull and Doncaster, which is currently being reviewed by the competition regulator.
http://www.theguardian.com/business/2015/jul/29/sainsburys-sells-pharmacy-business-celesio-125m
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