Amsterdam, July 6 - Dutch food and foodservice company Sligro will finish converting by November the remaining 30 of 80 stores acquired last year, boosting its position in the large-scale retail sector, its financial chief said on Friday.
Small-cap Sligro together with Sperwer Holding, which runs the Plus and Spar supermarket chains in the Netherlands, bought 223 Edah supermarkets from Laurus . The partners kept 80 stores each and sold or closed the rest.
"Today, over 50 stores have been converted. By November, all Edah stores will have been converted," Sligro's Chief Financial Officer Huub van Rozendaal told Reuters.
"By year-end, 80 percent of our business will be based on the large format, which is 800 to 1,500 square metres," he said.
The converted supermarkets have on average posted higher turnover than existing stores.
As part of this focus Sligro, which also operates the smaller format MeerMarkt, Attent and other chains, has decided to merge these activities with those of a similar scale from Sperwer and Spar, said van Rozendaal.
The venture, to be called Spar Holding, will have about 500 million euros ($680 million) in wholesale turnover and a 2.5 percent market share.
Sligro and Sperwer will each own 45 percent of the company and Spar the remaining 10 percent.
"The deal will be finalised in September. Sligro will see an impact on its earnings per share (EPS) from 2008 onwards," van Rozendaal said.
Investors welcomed the news, announced on Friday, sending Sligro shares up 2.4 percent to 31.45 euros by 1209 GMT versus a 0.25 percent rise in the small-cap index.
"We are positive on the transaction. It creates more focus within Sligro food at home operations while it is EPS enhancing," Petercam analyst Fernand de Boer wrote in a note. The brokerage raised its rating on the stock to 29 euros from 28.
Sligro is financing its share of the joint venture with its stores and the proceeds from the sale of real estate.