Albertsons' IPO plans at a standstill

Albertsons' IPO plans have been halted again, this time due to price deflation that has affected sales and earnings across the supermarket industry. Albertsons (Acme, Albertsons, Safeway, Vons and several others) originally proposed a public offering a year ago, but postponed it when Walmart's announcement about earnings pressure prompted an industry-wide drop in valuations.

Analysts are not optimistic that Albertsons will be able to achieve an IPO at the valuations contemplated last fall, when price deflation wasn't an issue and consumers were not as cautious as they seem to be now.

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.

Albertsons postpones IPO indefinitely

Albertsons, which had been expected to complete its initial public offering last Thursday, announced the day before that the IPO was postponed indefinitely due to recent market volatility. The company had said in a prospectus that it intended to offer 65.3 million shares priced at $23 to $26 per share, with the possibility of selling 9.8 million more shares if demand warranted it.

If all 75 million shares had been sold at the top of the range, the deal would have totaled $1.95 billion.

Albertsons operates about 2,200 stores in 33 states under banners that include Acme, Albertsons, Safeway, Vons, Jewel-Osco, Shaw's and others.

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.

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 reports net income increase, expects $67M gain from Genuardi's sale

Earlier this week Genuardi's parent company Safeway reported an increase in net income for the first quarter of 2012. In addition to Genuardi's, Safeway operates stores under the Vons, Dominick's and Safeway banner, among others.

• The company earned $72.9 million in the three months ended March 24, compared to $25.1 million during the same time period last year. (Last year's first quarter net income would have been $105.3 million if it were not for a large tax charge.)
• Revenue for the period rose 2.4% to $10 billion, up from $9.77 billion last year.
• Revenue at stores opened at least a year - a key indicator of the health of a retailer - was flat as compared to a year ago.

Safeway said it expects an estimated gain of about $67 million from the sale or closure of all the remaining Genuardi's stores later this year.

Safeway announces quarterly earnings, beats the street

Safeway's (Genuardi's) third quarter earnings of .38 cents per share beat analysts' estimates by three cents. The company, which released its earnings last week, credited positive sales momentum and cost control measures when discussing its results.

Safeway, which has stores under the Safeway, Vons and Dominick's banners, also owns Genuardi's here in the Greater Philadelphia market. Store closings and decreasing sales has led to speculation lately that Giant will soon buy a number of Genuardi's locations. Two Genuardi's stores in Bucks County were sold to Giant late last year.

For the quarter, Safeway's revenue grew 7% and same-store sales grew 1.5%.