Retailer Metro's Multi-Billion-Euro Sale Leaseback in Jeopardy

Retailer Metro's Multi-Billion-Euro Sale Leaseback in Jeopardy
A setback to Metro's MEOG.DE long awaited, multi-billion-euro sale of property assets hit the retail giant's shares on Friday as industry sources warned that the future of one of only two bidders now looked uncertain. Metro is the world's fifth-largest retailer.

Property firm Corpus-Immobiliengruppe has pulled out of one of the consortia bidding for the German firm's real estate portfolio, raising concerns that the deal could colapse. The consortia includes Morgan Stanley, Goldman Sachs and GE Capital. The loss of Corpus-Immobiliengruppe from the group meant the group no longer had the necessary know-how of a local real estate company at its disposal. The only other consortium includes Agiv, Merrill Lynch and the Blackstone group.

Metro's AIB property division is 49 percent owned by Metro and 51 percent owned by German state bank WestLB. The sale is expected to fetch more than three billion euros ($3.3 billion). Metro hopes to realise a 500 to 700 million gain from the property sale.

The Duesseldorf-based firm said as far back as 2000 that it wanted to focus on its core business by selling property that it would then lease back, an increasingly popular strategy among big retailers. Sphere: Related Content