Robert Tchenguiz has tabled an 'op-co/prop-co' split to the board of Sainsbury's that would return more than £4bn to shareholders. Sunday Times. Independent on Sunday.
Tchenguiz, advised by Citigroup, proposes to divide the company into two listed entities: one - possibly a REIT - holding the property assets; the other would be the supermarket operating company.
The property company would be leveraged at up to 60% of the value of the portfolio, raising borrowings from £1.6bn to more than £6bn. The supermarket operating company would devote a large proportion of profits to servicing the debt.
Tchenguiz, who has a 5.07% shareholding in Sainsbury's, is prepared to underwrite up to 20% of the shares in both companies if existing investors want to sell.
The retailer, which escaped takeover last week, is about to apppoint Atisreal to revalue its property portfolio. Sainsbury's is thought to want a valuation of its land bank that takes into account future development opportunities.
The book value of land in the last annual report was £5.2bn, although Sainsbury's estimates it is now worth up to £7.5bn.