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Asda IPO Possible In 2/3 Years, Says Company Chief


07/04/2019


Asda IPO Possible In 2/3 Years, Says Company Chief
The British supermarket group Asda, which is currently owned by the US retailing giant Walmart, could be put up for public listing in about two or three years, said the chief of Asda. 
 
Asda was attempted to be taken over by its rival Sainsbury’s in a proposed deal with 7.3 billion pound ($9.2 billion) which was blocked by the competition regulator of the United Kingdom. Soon after that incident, Walmart said in May that it would be trying to put Asda at the stock exchange in the UK though an initial public offering (IPO).
 
“If I was a betting man, I just think that is the sort of time the process will probably take,” Asda Chief Executive Roger Burnley said in an interview to the news agency Reuters.
 
“I use the phrase specifically that we’re ‘minded’ to an IPO,” he said, while trying to assert that no firm decision about the issue had been arrived at by neither Walmart or Asda and were also not close to discussing or finalizing a final date for the IPO.
 
Asda was acquired by Walmart,  the largest retailer in the world, in a deal in 1999 that was worth  6.7 billion pounds.
 
“There’s no burning platform, it’s whatever Walmart feel would be the best to make Asda successful and sustainable long term,” said Burnley. When asked whether the majority stake in Asda would be retained by Walmart after the British retailer was put up in the public market, he said: “I very much think so.”
 
And till; such time that a firm decision is not taken about a final date for launch of Asda IPO, the company would continue to try and convince its investors about the bright future of the company, said Burnley which has been the CEO of the company since January 2018.
 
“We need to be performing in the short term, create growth in the medium term and create a sustainable story in the long term.”
 
Walmart’s support has been “very strong” since the failure of the Sainsbury’s deal, said Burnley while talking to the media at the sidelines of Asda’s “Christmas in July” event where it showcases its festive product line-up. “Walmart will listen to any investments I want to make for sure, to make us sustainable into the future,” he said.
 
The current strategy being adopted by Asda is to focus completely on price competitiveness to close down the gap in terms of prices that the company has with the German discount retailers Aldi and Lidl. It is also creating strategies for greater innovation for its own-brand products, enhanced functioning and standards at its stores and greater sale through its online channel.
 
The company in May issued a warning of an “increasingly challenging backdrop” even though it has made underlying sales growth in eight straight quarters.
 
“We’re definitely in tough times, we’re in a little bit of a perfect storm,” Burnley said of the UK macro economic backdrop.

Echoing comments earlier on Wednesday from Sainsbury’s, he pointed to ongoing uncertainty around Brexit and a tough comparison with the same period last year when Britain enjoyed record hot weather and major events including a royal wedding and the men’s soccer World Cup.
 
(Source:www.euronews.com)