Albertsons Sets Price for $1.9B IPO

BOISE, ID—Albertsons Cos. Inc., which completed its $9.2-billion merger with Safeway Inc. this past January, set pricing for its initial public offering in an SEC filing Friday. The IPO was first announced in July, and will mark the supermarket operator's first step in exiting years of ownership by a Cerberus Capital Management-led consortium, according to the New York Times.

The SEC filing lists 65.3 million shares of common stock to be priced between $23 and $26 per share. Albertsons' IPO could raise up to $1.9 billion if it prices at the top end of its range and the underwriters exercise their full overallotment option of an additional 9.8 million shares. The company is expected to trade on the New York Stock Exchange under the ABS symbol.

Albertsons says it plans to use proceeds from the filing to repay debt. Underwriters include Goldman Sachs, Bank of America Merrill Lynch, Citigroup, Morgan Stanley and Lazard.

The grocery retailer founded by Joe Albertson in 1939 has been under institutional ownership since 2006, when an  investor group led by Supervalu acquired it for $9.2 billion. Within the context of that deal, a group including Cerberus affiliate AB Acquisition and Kimco Realty Corp. took control of 655 stores.

In 2013, a Cerberus-led group acquired Albertsons and several other chains from Supervalu for $3.3 billion. Albertsons' current ownership includes Cerberus, Kimco, Lubert-Adler Partners and Schottenstein Stores Corp.

As of June 30, Albertsons operated 2,205 stores across 33 states under banners that include Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs. It's ranked number one or two by market in 68% in the 121 metropolitan areas in which it operates, according to Friday's SEC filing.

After Albertsons filed a registration statement for an IPO in early July, it agreed to acquire 71 A&P locations from the bankrupt Great Atlantic Pacific & Tea Co. for $642 million, including the assumption of leases. A federal bankruptcy judge approved the sale on Sept. 21. The stores, which are located in the New York City and Philadelphia metro areas, will be rebranded as Acme.