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Sainsbury’s talks with LXi over sale of 18 stores collapse

Sainsbury’s talks with LXi REIT over sale of 18 supermarket stores collapse
// Sainsbury’s talks with LXi REIT over the sale and leaseback of its 18 supermarket stores collapse
// LXi REIT will no longer proceed with a share issue due to market volatility concerns

Sainsbury’s is no longer in discussions with real estate investor LXi REIT over the sale and leaseback of its 18 supermarket stores.

The grocer said the investment trust has decided not to proceed with a share issue that would have partly funded the transaction due to stock market volatility concerns, and the two parties are no longer in discussions.

LXi separately said the decision follows detailed and supportive discussions with its shareholders. Sainsbury’s said the decision would not affect its financial guidance.

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The two companies had said on Wednesday that they were in discussions for LXi to purchase and lease back nearly 20 supermarket stores in a £500 million deal.

LXi REIT has a market value of about £2.5 billion. It invests in commercial real estate assets which benefit from long leases, typically lasting decades, and is a member of the FTSE-250 index.

Sainsbury’s said if the transaction was carried out, proceeds would have been used to part-fund the purchase of 21 freehold Sainsbury’s supermarkets from other property portfolios.

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