Pick n Pay concludes Franklins sale

Johannesburg - Pick n Pay Stores [JSE:PIK] has finally sold its Franklins stores in Australia to Metcash after a court battle, the retailer said on Friday.

"We are delighted to complete the sale of Franklins to Metcash following a 15-month delay since the transaction was first announced," Pick n Pay chairperson Gareth Ackerman said in a statement.

Pick n Pay announced in July 2010 it had decided to sell Franklins to Metcash Trading Limited for $215m.

However, the Australian Competition and Consumer Commission (ACCC) opposed the transaction as it said the deal would substantially lessen competition.

It then applied to the Federal Court in Sydney to stop the proposed sale.

The court dismissed the application.

It also dismissed a subsequent application by the competition body for an interim injunction to prevent the completion of the sale while it appealed the court's decision.

The ACCC appeal would be heard on October 24 to 26.

"Our confidence in a successful outcome has been boosted by the comprehensive judgment in our favour in the Federal Court in late August and by the court's denial of the ACCC's application for an interim injunction," Ackerman said.

According to Franklins' website, Pick n Pay bought 50 Franklins stores in 2001. At the same time, it bought 19 Fresco supermarkets that became Franklins stores.

"While the decision to exit our Australian investment was a difficult one, it was clear to us that Franklins lacked the significant scale needed to compete effectively in this market," said Ackerman.