British supermarket group Morrisons is exploring options to raise up to 1 billion pounds ($1.36 billion) secured against part of its large freehold store portfolio, Sky News reported on Friday, citing sources.
The UK’s fifth-largest grocer has engaged real estate advisory firm CBRE to evaluate financing options, according to the report.
The move comes as Morrisons, owned by U.S. private equity firm Clayton Dubilier & Rice since 2021, seeks to strengthen its position after reporting flat annual earnings due to higher costs.
Chief Executive Rami Baitiéh, has been trying to modernise Morrisons, which differs from its main rivals in that it also has its own production operations, making half of the fresh food it sells. The grocer has been underperforming traditional peers Tesco and Sainsbury’s as well as discounters Aldi and Lidl.
Sky News said the process was at an early stage and unlikely to involve a conventional sale-and-leaseback transaction, with one option being a medium- or long-term borrowing deal secured against several of its supermarkets.
Morrisons and CBRE did not immediately respond to Reuters requests for comment.
Source: Reuters.com