Business briefs: As we heard from an in-store vendor earlier this week, the Albertson's deal is back in play again.
Albertson's Bidders Revive Deal Talk
Albertson's was sent a fresh bid from a private-equity group and Supervalu, with a new structure aimed at easing antitrust worries.Left for dead just three weeks ago, a $9.6 billion deal to purchase grocery chain Albertson's Inc. has been revived, according to people familiar with the matter.
A consortium of private-equity investors and supermarket chain Supervalu Inc. have submitted a new bid to the board of the nation's second-largest traditional grocery-store chain by revenue, according to these people. It includes a new structure designed to lessen antitrust worries, which had derailed a deal that was just hours away from completion in December. The new offer for the Boise, Idaho, retailer is valued a few cents above $26 a share.
...Under the deal expected in December, drugstore chain CVS Corp. was going to buy Albertson's pharmacy business for as much as $4 billion; a group led by private-equity firm Cerberus Capital Management LP and Kimco Realty Corp. was going to buy groups of poorly performing Albertson's stores for the value of their real estate; and Supervalu was going to swap stock and cash for hundreds of Albertson's better-performing stores, including its Jewel stores in the Chicago area.Just days before Christmas, the deal broke down in part over last-minute disagreements as to who would shoulder responsibility if regulators tried to block the deal because of antitrust concerns, said people familiar with the matter. One of the concerns was the overlap between Albertson's Chicago Jewel stores and Supervalu's grocery stores there, where Supervalu operates under the Cub banner.
... Supervalu is now offering to sell its own Chicago stores to Cerberus and operate the Albertson's stores, people familiar with the matter said. The buyout consortium is also planning to pay slightly above $26 per Albertson's share. ... CVS would keep its previous role in the plan.
Yes, I bet Supervalu would love to exchange the 200+ Jewel-Osco store for the 15 Cub stores.
A deal would also transform Supervalu from a largely regional grocery retailer into a much larger national grocery player. The Eden Prairie, Minn., wholesaler and retailer is the nation's eighth-largest food seller by sales, according to a Supermarket News rating based on 2004 sales.Supervalu has become one of the nation's most successful grocery chains by opening small-box stores stocked with lots of store-branded goods that are priced even cheaper than food at Wal-Mart. Albertson's has tried to imitate that concept without much success.
Tags: Albertson's, /Chicago
