Walmart Pauses Sale of Majority Stake in U.K. Grocer Asda

(Bloomberg) -- Walmart Inc. has put the sale of a majority stake in its U.K. grocery chain Asda on hold to focus management’s attention on running the business amid unprecedented spikes in demand driven by the coronavirus.

The world’s biggest retailer has paused the sale process, people familiar with the decision said Thursday, and there’s no timetable for talks with bidders to restart. Walmart told Asda’s leadership in recent days to concentrate on day-to-day business instead, the people said. Stockpiling by Britons lifted U.K. grocery sales to a record in March, and supermarkets around the globe have had trouble keeping everyday essentials in stock.

Private-equity firms Apollo Global Management Inc., Lone Star Funds and TDR Capital each submitted first-round offers for Asda last month and had been invited to join the next round of bidding, people familiar with the process said in mid-March, just a few days after the virus reached pandemic status. A deal for Asda could value the business at more than 7 billion pounds ($8.6 billion), according to one of the people, who asked not to be identified because the information is private.

But the recent market turmoil has hampered financing for leveraged buyouts, forcing companies to put a number of bidding processes on hold. EQT AB is deferring the sale of IFS, a software maker valued at more than 3 billion euros ($3.3 billion), while Bridgepoint is postponing the sale of Iberian agrochemical business Rovensa, Bloomberg News reported this week. Air Liquide SA’s sale of its German disinfectants unit has also been hurt after private-equity suitors’ access to financing was curbed, people with knowledge of the matter said last month.

Walmart has more than 630 Asda stores in Britain, a market it entered in 1999. In recent years Asda’s market share has been eroded by German discounters Aldi and Lidl, while traditional rivals like Tesco Plc and J Sainsbury Plc have made big acquisitions to bolster their clout with suppliers.

The pause in the sale process was first reported by CNBC.

©2020 Bloomberg L.P.

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