The decision ends speculation in published reports that that retail REIT Kimco Realty Trust, grocer Supervalu and private equity firm Cerberus Capital Management will buy Albertsons in a joint venture. CVS was also said to be interested in acquiring Albertsons' 700 Osco and Sav-On stand-alone drugstores. The deal for all assets was valued at $16 billion, reports said. For their part, CVS and Supervalu executives have both issued statements saying that they are no longer in acquisition talks with Albertsons.
In a report issued earlier this week, Lehman Bros. retail analyst Meredith Adler says Albertsons faces the biggest challenges in the Dallas, Denver and Florida markets, where its market share is weaker than its competitors. But Adler says she was skeptical of a buy of the entire company, "We see challenges for anyone trying to operate a downsized Albertsons given the deleveraging effect on corporate overhead and the loss of buying clout with vendors."
Albertsons executives first announced that they were putting the company up for sale in September. At that time, they said "there can be no assurance that any transaction will occur or, if one is undertaken, its terms or timing."
During the company's latest quarter, which ended Nov. 3, the grocer's earnings fell from the same year-ago period to $81 million from $114 million. Year-over-year same-store sales were also down, falling 0.4%. Albertsons operates 2,476 units under the Albertsons, Acme, Bristol Farms, Jewel-Osco, Osco Drug, Sav-on Drugs, Shaw's, Star Market and Super Saver names.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
