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Sainsbury mulls unit sale
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August 23, 2000: 6:19 a.m. ET
Home improvement chain on the auction block, may raise $1.5B
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LONDON (CNNfn) - J. Sainsbury PLC admitted Wednesday it planned to sell one of it best-performing units, home improvement chain Homebase. Reports have indicated the business might fetch around £1 billion ($1.5 billion).
Homebase is Britain's second-largest home improvement retailer, with some 12 percent of the market, according to published reports. Sainsbury, which has been struggling amid a fierce price war between Britain's largest grocery chains, said Wednesday it was "in the early stages of examining a number of strategic alternatives for Homebase."
Sainsbury (SBRY) stock rose 4.5 percent to 349 pence Wednesday. 
The U.K. company would not disclose with whom it is talking, although reports have suggested U.S. firm Home Depot Inc. (HD: Research, Estimates) and France's Leroy Merlin are interested in establishing a bridgehead in Britain.
Sainsbury is Britain's second-largest supermarket operator, having lost its leading position in the 1990s to Tesco PLC (TSCO). The company appointed a new chief executive, Peter Davis in January, with a brief to shake up the firm and improve returns to shareholders.
Homebase generated revenue of £1.43 billion in the year to the end of March 2000, up 10 percent, although operating profit dropped 13 percent to £65 million. Sainsbury as a whole had revenue of £17.4 billion, and reported a 25 percent slide in operating profit to £640 million. 
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Sainsbury
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