It was reported last week that Albertsons is considering a deal to acquire Sprouts Farmers Markets, and an industry source told me that he thought the likelihood of such a deal was 50-50.
Sprouts, based in Phoenix, is the largest farmers' market-style food retailer in the country. It operates more than 250 stores in 15 states, not including Pennsylvania, where a Philadelphia store is planned. There are no stores currently in New Jersey either, and it has been rumored that the company is looking for a site in South Jersey.
According to reports, Sprouts has plans to open 32 stores this year, following 36 new stores last year and 27 in 2015.
Jefferies Anlyst Chris Mandeville said last week that "the logic of a deal makes sense in our view," but added that it would be very expensive.
Albertsons, which is owned by Cerberus Capital, acquired Safeway and Supervalu in recent years. Reports said that the company was in talks to acquire Price Chopper late last year, but the deal never happened.
Showing posts with label Cerberus. Show all posts
Showing posts with label Cerberus. Show all posts
Monday, March 27, 2017
Tuesday, December 22, 2015
Plans in place again for Albertsons IPO
Albertsons (Acme, Albertsons, Safeway, Vons, Jewel-Osco et al) filed an amended stock prospectus for an initial public offering late last month in hopes of raising between $1.5 and $2 billion. The company had originally planned to hold the offering in October but called off the IPO due to market volatility.
The prospectus is seeking a sale of 65.3 million shares at a price between $23 and $26 per share, along with an over-allotment of 9.8 million shares. Albertsons says it plans to use the proceeds to pay down debt.
Albertsons is owned by a consortium led by Cerberus Capital Management, and includes real estate companies Kimco Realty, Klaff Realty, Lubert-Adler and Schottenstein Stores. This consortium will indirectly own approximately 83% of Albertsons common stock following the offering.
The prospectus is seeking a sale of 65.3 million shares at a price between $23 and $26 per share, along with an over-allotment of 9.8 million shares. Albertsons says it plans to use the proceeds to pay down debt.
Albertsons is owned by a consortium led by Cerberus Capital Management, and includes real estate companies Kimco Realty, Klaff Realty, Lubert-Adler and Schottenstein Stores. This consortium will indirectly own approximately 83% of Albertsons common stock following the offering.
Monday, July 20, 2015
Albertsons files for IPO
Earlier this month, Albertsons, the second-largest traditional supermarket operator in the United States (behind Kroger), filed for an initial public offering. The IPO, which comes only a couple years after an investor group led by Cerberus Capital Management purchased the company from Supervalu, is expected to raise about $100 million.
Albertsons said it plans to use the money to pay down debt and fund other corporate initiatives.
Albertsons currently operates over 2,200 grocery stores in 33 states under banners that include Albertsons, Acme, Safeway, Vons, Jewel-Osco and others.
Albertsons said it plans to use the money to pay down debt and fund other corporate initiatives.
Albertsons currently operates over 2,200 grocery stores in 33 states under banners that include Albertsons, Acme, Safeway, Vons, Jewel-Osco and others.
Tuesday, May 6, 2014
Acme making changes, seeing results under new president
Acme Markets, the long-time Philadelphia market leader that has fallen behind ShopRite and Giant in recent years, is investing profits back into stores and making a bit of a comeback.
The turnaround started shortly after Supervalu sold Acme and four other supermarket chains to a group led by Cerberus Capital Management. After the sale Jim Perkins was named Acme president, and his presence in Malvern, PA - not Supervalu headquarters in Minneapolis, MN - has meant that change is taking place more quickly.
"There's no red tape," said Perkins recently. "Everything we do is local. We all work here and live here."
Acme's current priorities are to offer more competitive pricing, better customer service, higher quality products and cleaner stores. Labor contracts are also a priority, and all but one has been renewed so far.
Television commercials recently started running with the company's new theme: "Acme, We're back!"
The turnaround started shortly after Supervalu sold Acme and four other supermarket chains to a group led by Cerberus Capital Management. After the sale Jim Perkins was named Acme president, and his presence in Malvern, PA - not Supervalu headquarters in Minneapolis, MN - has meant that change is taking place more quickly.
"There's no red tape," said Perkins recently. "Everything we do is local. We all work here and live here."
Acme's current priorities are to offer more competitive pricing, better customer service, higher quality products and cleaner stores. Labor contracts are also a priority, and all but one has been renewed so far.
Television commercials recently started running with the company's new theme: "Acme, We're back!"
Wednesday, April 30, 2014
Safeway reveals that Kroger would have paid more than Cerberus
According to a Wall Street Journal story citing Safeway's proxy statement, Kroger was willing to pay more for Safeway than Cerberus Capital Management did, but concerns over antitrust risk caused Safeway to make a deal with the private equity firm.
The story reports that Kroger first contacted Safeway in February about buying all or part of the company. Company executives met shortly thereafter, where antitrust issues dominated the conversation. A Kroger-Safeway deal would have combined the two largest U.S. grocery chains by market share, according to Euromonitor.
When Safeway signed a deal with Cerberus in early March, Safeway still allowed Kroger to continue its due diligence during a three-week "go-shop" window. Kroger reportedly contacted 26 potential buyers of Safeway stores that would most likely need to be sold to avoid antitrust problems. Eventually Kroger bowed out.
The Safeway proxy statement also showed that in January, Cerberus suggested that Safeway buy Albertson's - which Cerberus owns - in a leveraged capitalization. The deal would have required Safeway to pay a one-time dividend to its shareholders and issue new shares to Cerberus, thereby resulting in the private equity firm owning about half of Safeway with an option to buy more. Safeway didn't consider the idea.
In the final deal, Cerberus and Albertson's are contributing $1.25 billion in cash and borrowing the remaining $8.15 billion. The Wall Street Journal calls it one of the smallest equity checks - about 14% of the deal's value - since the financial crisis
The story reports that Kroger first contacted Safeway in February about buying all or part of the company. Company executives met shortly thereafter, where antitrust issues dominated the conversation. A Kroger-Safeway deal would have combined the two largest U.S. grocery chains by market share, according to Euromonitor.
When Safeway signed a deal with Cerberus in early March, Safeway still allowed Kroger to continue its due diligence during a three-week "go-shop" window. Kroger reportedly contacted 26 potential buyers of Safeway stores that would most likely need to be sold to avoid antitrust problems. Eventually Kroger bowed out.
The Safeway proxy statement also showed that in January, Cerberus suggested that Safeway buy Albertson's - which Cerberus owns - in a leveraged capitalization. The deal would have required Safeway to pay a one-time dividend to its shareholders and issue new shares to Cerberus, thereby resulting in the private equity firm owning about half of Safeway with an option to buy more. Safeway didn't consider the idea.
In the final deal, Cerberus and Albertson's are contributing $1.25 billion in cash and borrowing the remaining $8.15 billion. The Wall Street Journal calls it one of the smallest equity checks - about 14% of the deal's value - since the financial crisis
Friday, March 7, 2014
Cerberus to merge Albertsons with Safeway in $9 billion deal
AB Acquisition, an investor group led by Cerberus Capital Management, agreed to purchase Safeway yesterday for $9 billion, or $40 per share. The transaction is expected to close by the end of the year.
Cerberus plans to fund the acquisition, which is being called an Albertsons - Safeway merger, with debt financing of about $7.6 billion and contributions from partners and co-investors.
According to Supermarket News, the merger will create a company with more than 2,400 stores, 27 distribution facilities, 20 manufacturing plants and over 250,000 employees. No store closures are anticipated for now, although experts believe "divestitures" may be possible since the companies overlap in certain markets, particularly along the West Coast.
Safeway CEO Robert Edwards will become CEO of the combined company.
Combined sales for Safeway and Albertsons in 2013 totaled nearly $60 billion.
Thursday, March 6, 2014
Report says Kroger may be disrupting Safeway-Cerberus deal
3/7/14 Update: Cerberus to merge Albertsons with Safeway in $9 billion deal
In contrast to my post on Tuesday that said Kroger may work with Cerberus to take some Safeway stores the private equity firm might not want if they were to buy Safeway (Kroger could be a player in Safeway sale), a story in The Wall Street Journal online yesterday reported that Cerberus' efforts to purchase Safeway have been complicated by Kroger's involvement.
According to the story, Cerberus, which last year purchased Supervalu's Albertsons and Acme chains, among others, had been hoping to make a deal for Safeway this week. However, Kroger, the largest supermarket chain in the country, is now considering a bid on its own for all or part of Safeway. Cerberus is still seen as the most likely buyer, as Kroger could face antitrust issues in areas where the two companies compete.
The Wall Street Journal reports that Cerberus is offering to pay about $40 per share for Safeway, which would make the deal worth approximately $9 billion.
Cerberus and Kroger recently competed for Harris Teeter Supermarkets, and Kroger emerged victorious, paying $2.4 billion for the chain.
Safeway currently operates more than 1,300 stores in the West, Southwest, Rocky Mountain and Mid-Atlantic regions. In the last two years, the company sold or closed all but one of its Genuardi's stores. Last year it sold its Canadian division and closed or sold its 72 Dominick's stores in Chicago.
In contrast to my post on Tuesday that said Kroger may work with Cerberus to take some Safeway stores the private equity firm might not want if they were to buy Safeway (Kroger could be a player in Safeway sale), a story in The Wall Street Journal online yesterday reported that Cerberus' efforts to purchase Safeway have been complicated by Kroger's involvement.
According to the story, Cerberus, which last year purchased Supervalu's Albertsons and Acme chains, among others, had been hoping to make a deal for Safeway this week. However, Kroger, the largest supermarket chain in the country, is now considering a bid on its own for all or part of Safeway. Cerberus is still seen as the most likely buyer, as Kroger could face antitrust issues in areas where the two companies compete.
The Wall Street Journal reports that Cerberus is offering to pay about $40 per share for Safeway, which would make the deal worth approximately $9 billion.
Cerberus and Kroger recently competed for Harris Teeter Supermarkets, and Kroger emerged victorious, paying $2.4 billion for the chain.
Safeway currently operates more than 1,300 stores in the West, Southwest, Rocky Mountain and Mid-Atlantic regions. In the last two years, the company sold or closed all but one of its Genuardi's stores. Last year it sold its Canadian division and closed or sold its 72 Dominick's stores in Chicago.
Tuesday, March 4, 2014
Kroger could be a player in Safeway sale
According to published reports, Kroger, the largest supermarket chain in the U.S., recently approached Safeway about buying part of its operations. The reports also said that Kroger contacted Cerberus Capital Management, the private equity firm that is considered the favorite to purchase Safeway, about buying some stores that Cerberus may not want.
Cerberus led the investor group that purchased Supervalu last year. Safeway recently closed its 72 Dominick's stores in the Chicago area, sold its Canadian business, and in the last couple years sold or closed all but one of its Genuardi's stores.
Experts speculated that an arrangement between Kroger and Cerberus could help address antitrust concerns that could arise in select markets if one of the companies purchases Safeway.
Cerberus led the investor group that purchased Supervalu last year. Safeway recently closed its 72 Dominick's stores in the Chicago area, sold its Canadian business, and in the last couple years sold or closed all but one of its Genuardi's stores.
Experts speculated that an arrangement between Kroger and Cerberus could help address antitrust concerns that could arise in select markets if one of the companies purchases Safeway.
Thursday, February 20, 2014
Safeway confirms that it may sell
In October I wrote about a published report that claimed Cerberus was looking into a takeover of all or part of Safeway. Yesterday Safeway confirmed that discussions were taking place involving a possible sale of the company.
In a statement, the company said it "has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement..."
Last year Safeway sold its Canada and Dominick's divisions, and before that sold or closed all of its Genuardi's stores except one (Audubon, PA).
In a statement, the company said it "has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement..."
Last year Safeway sold its Canada and Dominick's divisions, and before that sold or closed all of its Genuardi's stores except one (Audubon, PA).
Friday, December 27, 2013
"Banner Churn" of 2013 may continue into 2014
Supermarket News published an informative year-end story about the many changes that took place this year in the food retail industry. They called it a year of "banner churn."
The article starts by pointing out that the "big three" made major moves. Kroger agreed to buy Harris Teeter, Safeway sold its Canada division and announced that its closing its Dominick's chain in Chicago (only a year after closing all but one of the company's Genuardi's stores), and Supervalu sold 877 stores - including the Albertsons and Acme chains - to an investment group led by Cerberus that includes Kimco and Philadelphia's Lubert Adler.
Regarding the Supervalu deal, Albertsons Chief Executive Robert Miller told Supermarket News that "we're in this for the long haul," and that "we have no plans to sell any of the brands."
Whether Miller is being truthful, or simply truthful for now, is yet to be seen. There are many that don't believe the company will hold on to Acme - or at least the banner's many underperforming stores - for very long.
As for the industry's future, Irene Marks and David Mell of Wells Fargo believe "consolidation and capital markets activity will remain robust well into 2014 as the grocery industry continues to evolve to suit today's eclectic, diverse and conscientious consumer."
To read the Supermarket News story, click here.
The article starts by pointing out that the "big three" made major moves. Kroger agreed to buy Harris Teeter, Safeway sold its Canada division and announced that its closing its Dominick's chain in Chicago (only a year after closing all but one of the company's Genuardi's stores), and Supervalu sold 877 stores - including the Albertsons and Acme chains - to an investment group led by Cerberus that includes Kimco and Philadelphia's Lubert Adler.
Regarding the Supervalu deal, Albertsons Chief Executive Robert Miller told Supermarket News that "we're in this for the long haul," and that "we have no plans to sell any of the brands."
Whether Miller is being truthful, or simply truthful for now, is yet to be seen. There are many that don't believe the company will hold on to Acme - or at least the banner's many underperforming stores - for very long.
As for the industry's future, Irene Marks and David Mell of Wells Fargo believe "consolidation and capital markets activity will remain robust well into 2014 as the grocery industry continues to evolve to suit today's eclectic, diverse and conscientious consumer."
To read the Supermarket News story, click here.
Wednesday, October 23, 2013
Cerberus exploring a deal to takeover Safeway
According to a report from The Chicago Tribune, Cerberus Capital Management is exploring a deal for all or part of Safeway, the second-largest supermarket operator in the U.S. In addition, Supermarket News said this morning that according to a Reuters report, Safeway has engaged Goldman Sachs to explore a potential private equity takeover.
Safeway, which exited the Philadelphia market by selling or closing its Genuardi's stores (with the exception of one remaining store in Audubon, PA) and recently announced that it plans to exit the Chicago market by selling its Dominick's chain, just received clearance from Canada to sell its 212 stores there to Empire Co. for $5.8 billion in cash.
Earlier this year, Cerberus led an investor group that included Kimco in a $3.3 billion acquisition of a group of supermarket chains from Supervalu that included Acme, Albertsons and Jewel-Osco.
Other grocery deals completed this year included Kroger's $2.5 billion acquisition of Harris Teeter, Bi-Lo Holdings $265 million purchase of three Delhaize chains, and Spartan's acquisition of Nash Finch.
Safeway has experience with private equity, as KKR took the supermarket chain private in 1986. KKR sold its stake 13 years later and reportedly made a $7 billion profit.
According to Safeway's website, there are currently over 1,600 Safeway stores in the United States and Canada. Banners include Safeway, Vons, Dominick's, Randalls, Tom Thumb and Carrs.
Safeway, which exited the Philadelphia market by selling or closing its Genuardi's stores (with the exception of one remaining store in Audubon, PA) and recently announced that it plans to exit the Chicago market by selling its Dominick's chain, just received clearance from Canada to sell its 212 stores there to Empire Co. for $5.8 billion in cash.
Earlier this year, Cerberus led an investor group that included Kimco in a $3.3 billion acquisition of a group of supermarket chains from Supervalu that included Acme, Albertsons and Jewel-Osco.
Other grocery deals completed this year included Kroger's $2.5 billion acquisition of Harris Teeter, Bi-Lo Holdings $265 million purchase of three Delhaize chains, and Spartan's acquisition of Nash Finch.
Safeway has experience with private equity, as KKR took the supermarket chain private in 1986. KKR sold its stake 13 years later and reportedly made a $7 billion profit.
According to Safeway's website, there are currently over 1,600 Safeway stores in the United States and Canada. Banners include Safeway, Vons, Dominick's, Randalls, Tom Thumb and Carrs.
Thursday, September 26, 2013
Acme in King of Prussia to take on Wegmans
The Philadelphia Business Journal and The Times Herald reported this week on Acme's recent makeover in King of Prussia, as the former market leader attempts to battle with Wegmans and other local food retailers for market share. According to the articles, Acme has lowered prices on 7,000 grocery items, eliminated its loyalty card and made some cosmetic tweaks.
According to Acme Markets President Jim Perkins, an industry rating system has Acme jumping eight points in recent weeks. The system measures service, cleanliness, speed at checkout, freshness and quality of products. Perkins said that a one or two point jump is considered a significant increase, so he was thrilled by the eight point improvement.
Perkins took over as Acme President last March, after parent-company Supervalu was sold to a group led by Cerberus Capital Management. Acme operates under the company division of New Albertsons, Inc.
Acme's debut in King of Prussia came 50 years ago in 1963. That same year JC Penney and E.J. Korvette opened at The Plaza at King of Prussia. Acme relocated to its present location in the early 90's as the mall expanded.
According to Acme Markets President Jim Perkins, an industry rating system has Acme jumping eight points in recent weeks. The system measures service, cleanliness, speed at checkout, freshness and quality of products. Perkins said that a one or two point jump is considered a significant increase, so he was thrilled by the eight point improvement.
Perkins took over as Acme President last March, after parent-company Supervalu was sold to a group led by Cerberus Capital Management. Acme operates under the company division of New Albertsons, Inc.
Acme's debut in King of Prussia came 50 years ago in 1963. That same year JC Penney and E.J. Korvette opened at The Plaza at King of Prussia. Acme relocated to its present location in the early 90's as the mall expanded.
Friday, September 20, 2013
Supermarket analysts expect more industry consolidation
Supermarket analysts gathered at the 18th annual Supermarket News Analysts Roundtable in New York earlier this week and agreed that a new wave of consolidation will hit the industry in the near future, and that Kroger may lead the way as a buyer.
In the last two weeks two major deals have been announced: Albertsons LLC agreed to purchase United Supermarkets, and Yucaipa Cos. is planning to acquire Tesco's Fresh & Easy Neighborhood Market chain (Tesco paying Yucaipa to take on its Fresh & Easy grocery stores).
Analyst Gary Giblen (GMC Capital) said the underlying theme of future consolidation would be defensive, due in large part to the expansion of discounters creating "an impetus for companies to get bigger, to get more volume power and hopefully to get some operating synergies and economies of scale."
Scott Mushkin (Wolfe Research) said he expects Kroger, the largest supermarket chain in the United States, to get more aggressive since "the assets available aren't massively expensive, and in many cases Kroger is the most logical buyer."
Meredith Adler (Barclays Capital) pointed out that "really cheap money" promotes consolidation, but doubts there are many companies Kroger would want. She argued that Kroger's pending purchase of Harris Teeter simply shows that if you're a class act, run great stores and have positive comps, then you're an attractive takeover candidate.
The analysts also agreed that Cerberus Capital, which headed the group that acquired Albertsons, Acme and others from Supervalu earlier this year, might continue its involvement in the consolidation process, even though it has its hands full with the banners it bought.
In the last two weeks two major deals have been announced: Albertsons LLC agreed to purchase United Supermarkets, and Yucaipa Cos. is planning to acquire Tesco's Fresh & Easy Neighborhood Market chain (Tesco paying Yucaipa to take on its Fresh & Easy grocery stores).
Analyst Gary Giblen (GMC Capital) said the underlying theme of future consolidation would be defensive, due in large part to the expansion of discounters creating "an impetus for companies to get bigger, to get more volume power and hopefully to get some operating synergies and economies of scale."
Scott Mushkin (Wolfe Research) said he expects Kroger, the largest supermarket chain in the United States, to get more aggressive since "the assets available aren't massively expensive, and in many cases Kroger is the most logical buyer."
Meredith Adler (Barclays Capital) pointed out that "really cheap money" promotes consolidation, but doubts there are many companies Kroger would want. She argued that Kroger's pending purchase of Harris Teeter simply shows that if you're a class act, run great stores and have positive comps, then you're an attractive takeover candidate.
The analysts also agreed that Cerberus Capital, which headed the group that acquired Albertsons, Acme and others from Supervalu earlier this year, might continue its involvement in the consolidation process, even though it has its hands full with the banners it bought.
Tuesday, May 28, 2013
Cerberus reportedly looking at Harris Teeter
There were a number of reports last week speculating that Cerberus Capital Management may decide to expand its grocery business by bidding on existing supermarket chains. Cerberus led an investor group earlier this year in the purchase of several Supervalu banners, including Albertsons and Acme.
Much of the recent speculation has focused on Harris Teeter, a publicly-traded chain with about 200 stores on the east coast that has been exploring a potential sale for months. Private equity firm Bain Capital has also been rumored to be looking at the chain.
Wednesday, May 15, 2013
Philly's fragmented market weeding out "losers"
A recent story in the Supermarket News says that Philadelphia's grocery landscape is "largely being written by its losers." And by losers Supermarket News means Genuardi's, Acme and A&P (Pathmark, SuperFresh).
Genuardi's is down to one store, and the exit of the once mighty brand set the stage for Giant to compete with ShopRite as the market's leading grocer. No one is sure yet what will happen to Acme, which is now part of the investor group led by Cerberus, and A&P continues to struggle.
Bob Gorland of Matthew P. Casey & Associates claims that no other metro area in the entire U.S. has as many chain and strong independent operators as Philadelphia, noting that every major club store and drug chain is here, not to mention "numerous price operators of all shapes and sizes."
The result is a fragmented market, with "losers" giving way to gainers like Giant, ShopRite, Wegmans, Walmart and Bottom Dollar. And the biggest opportunities ahead, according to Gorland, are for the stronger competitors to take over the weaker ones.
Below are the market share leaders for the 11-county Philadelphia market, according to Metro Market Studies, a firm based in Tuscon, AZ.
Note that this is a faulty list, as ShopRite is listed by operator, not as one brand. Last June's Food Trade News market study listed ShopRite as the clear market leader of the 15-county Delaware Valley.
Giant - 15.1%
Acme - 14.9%
Walmart - 5.9%
Pathmark - 5.6%
BJ's - 4.9%
Costco - 4.7%
Wawa - 4.6%
Wegmans - 4.0%
Brown's ShopRite - 3.6%
Zallie ShopRite - 3.1%
Genuardi's is down to one store, and the exit of the once mighty brand set the stage for Giant to compete with ShopRite as the market's leading grocer. No one is sure yet what will happen to Acme, which is now part of the investor group led by Cerberus, and A&P continues to struggle.
Bob Gorland of Matthew P. Casey & Associates claims that no other metro area in the entire U.S. has as many chain and strong independent operators as Philadelphia, noting that every major club store and drug chain is here, not to mention "numerous price operators of all shapes and sizes."
The result is a fragmented market, with "losers" giving way to gainers like Giant, ShopRite, Wegmans, Walmart and Bottom Dollar. And the biggest opportunities ahead, according to Gorland, are for the stronger competitors to take over the weaker ones.
Below are the market share leaders for the 11-county Philadelphia market, according to Metro Market Studies, a firm based in Tuscon, AZ.
Note that this is a faulty list, as ShopRite is listed by operator, not as one brand. Last June's Food Trade News market study listed ShopRite as the clear market leader of the 15-county Delaware Valley.
Giant - 15.1%
Acme - 14.9%
Walmart - 5.9%
Pathmark - 5.6%
BJ's - 4.9%
Costco - 4.7%
Wawa - 4.6%
Wegmans - 4.0%
Brown's ShopRite - 3.6%
Zallie ShopRite - 3.1%
Friday, April 26, 2013
Supervalu to decentralize banners, focus on Save-A-Lot pricing
CEO Sam Duncan said this week that Supervalu's focus would be on decentralizing its retail banners, pricing at Save-A-Lot, and recharging its wholesale business. His comments came as the company announced its fiscal fourth quarter earnings, which were significantly affected by the costs associated with the recent sale of five banners to a group led by Cerberus Capital Management.
For the quarter, Supervalu lost $1.4 billion, but Wall Street seemed optimistic about the company, as the stock jumped about 10% after the announcement and has held its gains as of Friday afternoon.
For the quarter, Supervalu lost $1.4 billion, but Wall Street seemed optimistic about the company, as the stock jumped about 10% after the announcement and has held its gains as of Friday afternoon.
Thursday, March 28, 2013
Supervalu to eliminate 1,100 jobs
Just days after the sale of five of its grocery chains was completed, Supervalu announced it will eliminate about 1,100 jobs, or approximately 3% of its workforce. The company said its remaining business will need fewer corporate and store support roles and functions.
Store-level and Save-A-Lot employees are not expected to be affected by the reductions.
On Thursday, March 21, Supervalu completed the sale of Acme, Albertson's, Jewel-Osco, Shaw's and Star Market to an investor group led by Cerberus Capital Management. Supervalu's remaining businesses include Save-A-Lot and smaller regional chains including Cub, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's. It also operates a wholesale grocery distribution business.
Store-level and Save-A-Lot employees are not expected to be affected by the reductions.
On Thursday, March 21, Supervalu completed the sale of Acme, Albertson's, Jewel-Osco, Shaw's and Star Market to an investor group led by Cerberus Capital Management. Supervalu's remaining businesses include Save-A-Lot and smaller regional chains including Cub, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's. It also operates a wholesale grocery distribution business.
Monday, February 18, 2013
Supervalu gives $23 million to four departing execs
According to documents filed with the SEC, Supervalu is giving $22.78 million in "golden parachutes" to four executives, including CEO Wayne Sales. Sales will receive $12.8 million, about two thirds of which will be in cash.
Sales replaced Craig Herkert as CEO last July, and is expected to leave the company when the $3.3 billion deal with a group led by Cerberus Capital closes at the end of March. The deal will result in the sale of five Supervalu brands, including Albertsons and Acme.
Documents also revealed that new CEO Sam Duncan will receive an annual salary of $1.5 million along with a signing bonus of $500,000. He is also eligible for bonuses and stock options.
Sales replaced Craig Herkert as CEO last July, and is expected to leave the company when the $3.3 billion deal with a group led by Cerberus Capital closes at the end of March. The deal will result in the sale of five Supervalu brands, including Albertsons and Acme.
Documents also revealed that new CEO Sam Duncan will receive an annual salary of $1.5 million along with a signing bonus of $500,000. He is also eligible for bonuses and stock options.
Friday, January 25, 2013
Cerberus to invest in Supervalu, install new leadership
Only a couple weeks after a group led by Cerberus Capital Management agreed to buy five Supervalu grocery chains for $3.3 billion, an investment group led by Cerberus is scheduled to take control of 20-30% of Supervalu and install a new executive leadership group.
According to Neil Stern, a senior partner at McMillanDoolittle, it's a good deal for Supervalu "because it makes it a more viable company in the long run (by turning) the clock back to where it was in 2006, before the Albertsons acquisition, and it will now be clearer how the company is performing."
Once the deal is done, Supervalu will continue to:
In addition, Sam Duncan will become Supervalu's president and chief executive officer. He has previously served in similar capacities at OfficeMax, ShopKo Stores, Fred Meyer and Ralphs Grocery Co.
According to analysts, Supervalu will have to develop a new organizational structure, cut costs, turn Save-A-Lot around and devise a long-term financial plan for the company.
Many believe the company's success will be driven by Save-A-Lot, as traditional grocery stores have more limited growth prospects.
Related story: Supervalu sells Acme and four other brands; Kimco in on the deal
According to Neil Stern, a senior partner at McMillanDoolittle, it's a good deal for Supervalu "because it makes it a more viable company in the long run (by turning) the clock back to where it was in 2006, before the Albertsons acquisition, and it will now be clearer how the company is performing."
Once the deal is done, Supervalu will continue to:
- Operate as a wholesale distributor;
- Own or license the Save-A-Lot chain;
- Own the 184 stores operating as Cub Foods, Shoppers Food & Pharmacy, Farm Fresh, Shop 'n Save and Hornbacher's.
In addition, Sam Duncan will become Supervalu's president and chief executive officer. He has previously served in similar capacities at OfficeMax, ShopKo Stores, Fred Meyer and Ralphs Grocery Co.
According to analysts, Supervalu will have to develop a new organizational structure, cut costs, turn Save-A-Lot around and devise a long-term financial plan for the company.
Many believe the company's success will be driven by Save-A-Lot, as traditional grocery stores have more limited growth prospects.
Related story: Supervalu sells Acme and four other brands; Kimco in on the deal
Wednesday, January 16, 2013
Property worth $4.4 billion in Supervalu deal
In a Wall Street Journal story published earlier this week, Karen Short of BMO Capital Markets estimates the property value of the real estate bought by Cerberus Capital Management and its partners from Supervalu to be worth $4.4 billion. The partnership group agreed to pay $3.3 billion for Albertsons, Acme, Jewel-Osco, Star Market and Shaw's grocery stores.
According to the article, about half the 877 stores to be purchased are company-owned or subject to ground leases.
Cerberus' partners in the deal - Kimco Realty, Klaff Realty, Lubert-Adler and Schottenstein Real Estate Group - are all real estate companies, and are the same partners that teamed with Cerberus in 2006 to purchase 650 Albertsons stores. The group sold off some of those stores, closed others and kept several in operation. And they reportedly earned significant profits.
According to Kimco COO Mike Pappagallo, "Even though we recognize that the benefit here is primarily improving the overall operation of the business, we're comfortable with the fact that the real estate value we have, at minimum, supports the purchase price."
According to the article, about half the 877 stores to be purchased are company-owned or subject to ground leases.
Cerberus' partners in the deal - Kimco Realty, Klaff Realty, Lubert-Adler and Schottenstein Real Estate Group - are all real estate companies, and are the same partners that teamed with Cerberus in 2006 to purchase 650 Albertsons stores. The group sold off some of those stores, closed others and kept several in operation. And they reportedly earned significant profits.
According to Kimco COO Mike Pappagallo, "Even though we recognize that the benefit here is primarily improving the overall operation of the business, we're comfortable with the fact that the real estate value we have, at minimum, supports the purchase price."
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