SuperValu to Receive Offers from Private Equity Firms for Purchase of Save-A-Lot Business
SANDPOINT, ID – In the continuing speculation surrounding the company’s Save-A-Lot chain, reports have surfaced that SuperValu may soon be on the receiving end of some offers for the business. Some of these impending proposals are expected to value the chain at as much as $1.8 billion.
Unnamed sources, according to Reuters, stated that later this week six private equity firms will participate in an auction for Save-A-Lot. SuperValu is expected to conclude the auction before deciding whether to perform an outright sale of the chain, or spin it off to company shareholders.
The private equity firms named to participate in the upcoming auction are as follows:
- Advent International Corp
- KKR & Co LP
- TPG Capital LP
- Onex Corp
- Thomas H. Lee Partners LP
- Clayton, Dubilier & Rice LLC
SuperValu confirmed in a press release that the company is preparing for the separation of its Save-A-Lot business and is currently pursuing a spin-off course of action for the business. However, the company also stated that it remains open other possibilities which would improve stockholder value, including a sale of the business.
As we previously reported, SuperValu first confirmed the spin-off or sale of Save-A-Lot at the end of last year. Following a string of strategy shifts and executive appointments, it appears as though SuperValu’s plan to insulate the chain and debt has reached the next stage.
Following the news of a possible Save-A-Lot buyout on the horizon, Reuters stated that SuperValu’s shares rose more than 7 percent on Friday before ending up 4.9 percent at $4.88.
As of February, Save-A-Lot operated 463 stores with an additional 897 stores run by its licensees. Reuters stated that as of June 18, the company had a total of $2.3 billion in debt.
Reuters reported that all named private equity firms have yet to respond about their rumored offers to SuperValu. The sources quoted asked to remain unidentified as the matter is still confidential, but did divulge that they are people close to the matter.
How much value will the buyout bids place on the Save-A-Lot chain, and will SuperValu choose a spin-off or sale point of projection? AndNowUKnow will have the latest as the issue unfolds.
