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Domino’s moves into 'giveaway' pizza business as it pays to offload Norwegian arm

Domino's Norway will be taken by two minority shareholders for around £10mln, analysts expect

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Domino’s Pizza Group PLC (LON:DOM) has finally agreed the disposal of its loss-making Norwegian business but it came at a cost - around £10mln, analysts say.

The fast-food chain had to pay two existing minority shareholders to take over Domino's Norway after posting an 18% quarterly drop in like-for-like sales.

READ: Domino’s Pizza prioritises sale of international arm as overseas sales slide

The FTSE 250-listed company will dish out a total cash outlay of up to £7mln, in addition to funding the losses made until completion, targeted for May.

It will also have to pay £2.9mln in liabilities, such as costs related to shutting underperforming shops.

Analysts at UBS expect accounts to be hit by £10mln.

The two 'buyers' are Norwegian firm Pizza Holding and Icelandic company EYJA Fjarfestingafelag, which combined own 29% in the 56 stores across Norway.

Domino' has received their stakes in the Swedish business in exchange, making the group its only owner, paving the way for an easier future sale - or giveaway.

“The implementation of the disposal strategy will simplify the group and increase investor focus on the core UK business, which has delivered a resilient performance through a period of turbulence,” analysts at Peel Hunt said in a note.

Shares inched up 1% to 311p on Thursday morning.

Quick facts: Domino's Pizza Group PLC

Price: 315.4 GBX

LSE:DOM
Market: LSE
Market Cap: £1.46 billion
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