Could Asda be listed on the stock market? - Professor John Colley comments
Professor John Colley, associate dean of Warwick Business School and former Managing Director of a FTSE 100 company, discusses the possibility that Asda could be listed on the stock market after its merger with supermarket rival Sainsbury's was blocked by the competition authorities.
"Having pinned all their hopes on a merger, bosses at Asda and Sainsbury's are now struggling to find a Plan B for their businesses.
"Asda is clearly not wanted by Walmart, which is occupied with greater challenges such as the threat of Amazon.
"The fact that an IPO is being considered suggests private equity firms are not interested at a price which will appeal to Walmart. However an IPO also seems unlikely as future growth is likely to be limited.
"If the ‘Big 4’ want to keep their market shares they will have to sharpen their prices in the face of rapidly expanding cost players Aldi and Lidl. The likelihood of a bleak future will not make Asda attractive to potential investors in an IPO."