Metcash shares are going nuts over plans to float its auto business

The Williams team prepares for a tyre change at the Spanish Formula One Grand Prix. Mark Thompson/Getty Images

Metcash, which operates IGA supermarkets, wants to float off its Automotive Division which generates about $250 million a year.

The automotive network includes Autobarn, Autopro, ABS and Midas. There’s also an automotive aftermarket parts and accessories wholesale business.

Proceeds of an IPO would be invested in the core business.

Metcash, which is being squeezed in the supermarket business by Aldi and Costco, has appointed Citi to advise on a strategic review and a potential IPO.

The company’s sales revenue increased just 1% in the first half to $6.6 billion. Underlying profit after tax fell 9% to $101.7 million.

Its shares are up more than 11% to $1.43.

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