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Sainsbury sells $1.4B unit
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December 22, 2000: 4:04 a.m. ET
U.K. supermarket sells Homebase home improvement chain
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LONDON (CNNfn) - Supermarket retailer J.Sainsbury PLC sold its Homebase home improvement chain for £969 million ($1.4 billion) Friday.
Britain's second-largest supermarket chain had conducted an auction of Homebase, eventually deciding to sell to private equity firm Schroder Ventures.
Under the terms of the deal, which also includes the sale of 28 undeveloped sites to fellow retailer Kingfisher PLC, Sainsbury will retain an 18 percent interest in Homebase.
Cut-throat conditions in the U.K. supermarket sector and a desire to expand its core operations overseas left Sainsbury without the cash to develop the Homebase unit.
The sale process, which came to light as long ago as August, dragged on longer than originally anticipated amid media reports that the number of interested parties had dwindled because of the high price.
As part of the deal Kingfisher is paying Sainsbury £219 million in cash for the 28 undeveloped sites which can be turned into home improvement stores.
Homebase generated revenue of £1.43 billion in the year to the end of March 2000, up 10 percent from the previous year, 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.
Sainsbury (SBRY) stock was 1.1 percent higher at 953 pence in early London trade Friday. 
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J Sainsbury
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