Grocery store chain Supervalu Inc. (SVU: Quote), which reported a plunge in quarterly profit last week, is expected to provide prospective buyers with its financial information, the Wall Street Journal reported, quoting people familiar with the matter.
Buyout firms, supermarket operators and distributors could be interested in Supervalu. Privately-held C&S Wholesale Grocers Inc. as well as private equity firms Cerberus Capital Management, Kohlberg Kravis Roberts & Co. and TPG Capital are expected to be approached.
Supervalu has been facing rough weather lately, as customers switch over to Wal-Mart Stores seeking lower prices. The stiff competition and higher costs hurt its bottom line. The company is now trying to curb costs to aggressively lower its prices to improve customer satisfaction.
The company also revealed a strategic alternatives review recently, which could also possibly include a sale, and suspended its dividend payment.
Last month, Supervalu disclosed plans to cut 2,200 to 2,500 jobs at its subsidiary Albertsons, which is grappling with declining traffic and sales. The cuts were spread across all 247 Albertsons stores in California and Nevada. Albertsons is the largest retail chain at Supervalu.
According to the WSJ report, Supervalu would send out agreements of confidentiality to interested bidders this week. It is not clear whether the company might be sold in parts or as a whole.
Buyout firms could be interested in Supervalu's retail store brands such as Albertsons, Shaw's, Acme, Jewel-Osco and Save-A-Lot. On the other hand, C&S could be interested in the grocery chain's distribution operations.
It is also possible for C&S to tie up with a buyout firm for the purchase and then split the assets that meet its requirements.
SVU climbed 6.9 percent on Monday to close at $2.48 on 34.64 million shares, compared to the 3-month average volume of 9.02 million shares.
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by RTT Staff Writer
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