Dutch supermarket operator Ahold has decided not to engage in a major sell-off of its property after a review of its global real estate assets established that the market value of its portfolio was EUR 900 mln more than the book value of EUR 4.7 bn. 'The review clearly showed that the majority of investment properties has strategic importance for operating purposes and will remain in the company's portfolio,' Ahold said at the announcement of its third-quarter results. The company said 'non-strategic assets' would be sold over time and would likely yield EUR 100 mln.
Dutch supermarket operator Ahold has decided not to engage in a major sell-off of its property after a review of its global real estate assets established that the market value of its portfolio was EUR 900 mln more than the book value of EUR 4.7 bn. 'The review clearly showed that the majority of investment properties has strategic importance for operating purposes and will remain in the company's portfolio,' Ahold said at the announcement of its third-quarter results. The company said 'non-strategic assets' would be sold over time and would likely yield EUR 100 mln.
Last year, two shareholders, London-based hedge fund Centaurus Capital and its US counterpart Paulson called on Ahold's management to break the company up to buttress the company's flagging share value. Centaurus and Paulson argued Ahold should sell its underperforming chains, particularly the US business, or at least divest some of its property portfolio in a sale-and-leaseback scheme.
Although Ahold has ruled out selling its property, it agreed last week to sell its Tops Markets chain in the US to Morgan Stanley Private Equity for $310 mln.
From humble beginnings as a single family-run grocery store in 1887, the company grew to become the number one retailer in the Netherlands in the 1900s. An aggressive foreign expansion programme propelled Ahold into the ranks of one of the world's largest retail chains in the late 1990s. But Ahold was brought to its knees abruptly by an accounting scandal in 2003, and since then it has had to sell some of its businesses in Latin America and elsewhere to focus on Europe and the US.