German retailer Metro AG said on Wednesday it had put the sale of its property portfolio on hold because of uncertainty over government plans to tax real estate disposals, sending its shares tumbling.
Sources close to the talks said last month the long-awaited sale of sites such as supermarkets and other retail spaces, which could raise around three billion euros (dollars) for the firm, was near.
'We could start thinking about this again in spring next year,' a company source told Reuters on Wednesday. 'The temporary abandonment of the property disposal will not have any immediate effect on Metro´s profitability.'
German retailers are suffering one of their worst years in decades as economic gloom and high unemployment forces consumers to tighten their belts, and analysts had welcomed Metro´s attempts to boost its income with the property sale.
U.S. private equity group Blackstone, General Electric´s finance unit and investment banks Goldman Sachs, Morgan Stanley and Merrill Lynch were in the running to buy the portfolio, sources said.
The sprawling international retailer said in 2000 it planned to sell the portfolio within two or three years as part of a strategy to focus on its core business. The deal would rank as one of Germany´s biggest recent real estate deals.
Metro, which wants to retain use of the property through a sale-and-leaseback deal, has said it would book an extraordinary gain of 500-700 million euros from the sale.