Asda sale talks back on, Walmart reveals

After the collapse of a planned merger between Asda and Sainsbury’s, Walmart disclosed earlier this year that it was talking to investors interested in taking a majority stake in the grocer. However, the conversation was put on ice as the Covid pandemic sent the world into lockdown.

Talks have now started again. A Walmart spokesperson said: “Walmart and Asda have restarted conversations with a small number of third-party investors who are interested in acquiring a stake in Asda and partnering with Walmart, following renewed inbound interest.

“The pandemic has demonstrated Asda’s resilience and the key role we play in supporting different communities. We have a clear strategy and a long heritage in delivering value for customers and, with this in mind, we believe now is the right time to explore options for a third party to invest in our business to accelerate the long-term delivery of our value strategy, both in stores and online.”

However, Walmart also cautioned that there was no certainty a deal would go ahead.

Previously it is thought that private equity groups including Apollo Global Management, Lone Star Funds and TDR Capital had been interested in buying in to Asda, which could be valued at about £7bn.

Shore Capital analyst Clive Black said: “Such private equity interest also shines a light on UK supermarket equities that appear a little out of favour at this time, businesses that have refound their defensiveness and could well be good opportunities for downside support once the present liquidity splurge from central banks and governments ease.”