Hannaford Becomes a Serious Bidder for Market Basket
TEWKSBURY, MA - News is breaking that Hannaford Bros. has entered a serious offer to purchase majority control of Market Basket from Arthur S. Demoulas' side of the family, one which makes Arthur T. Demoulas' own attempts to obtain majority control of his family's business a lot more complicated.
Kevin Griffin, publisher of the Griffin Report on Food Marketing, told the Boston Globe that Hannaford has a lot to gain from a Market Basket acquisition.
“When I think about the geographic locations of Hannaford and Market Basket, there’s some overlap, but I think they would be mostly complementary,” he said.
Arthur T. Demoulas and his side of the family currently enjoy control over 49.5% of the controlling shares for Market Basket, a number he has been trying to increase with attempts to buyout control over the 50.5% of the business owned by his cousin Arthur S. Demoulas' side of the family. Until now, Arthur T. Demoulas was the clear front runner in buyout talks and considered by many Market Basket's only chance to restore peace after the labor controversy his firing early this summer created.
For more on that controversy check out ANUK's previous article here.
What a Hannaford acquisition would mean for Arthur T. Demoulas is unclear. Potentially, Hannaford executives could return Arthur T. Demoulas to his former position as President and CEO of the company.
“The problem there is they would have to have a lot of faith in Arthur T., and you can basically never get rid of him if it doesn’t work out,” Gary Chaison told the Boston Globe. “But I think the only way out is a return to the past, with Arthur T. getting his job back.”
James J. Hanks, a specialist in mergers, acquisitions and corporate governance at Northwestern Law School, sees the possibility of other courses of actions. If Hannaford wanted its own candidate in the CEO seat, it could offer Arthur T. Demoulas a lesser position of influence within the company such as an executive advisory role.
There is also the possibility of an attempt to force Demoulas' hand to get him to sell his own shares of Market Basket.
“The buyer could go to Arthur T. and play hardball and say, ‘We have the votes to merge Market Basket with our chain that we own 100 percent,’ ” Hanks said.
This would dilute Arthur T. Demoulas' ownership shares, dramatically weakening his influence within the company.
With so many variables in the equation, the simple truth is that it is hard for anyone to predict what will happen next for Market Basket. When the news does break however, you can count on AndNowUKnow to be there first to keep you in the know.
