The New York-listed group will sell its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition, a vehicle backed by Cerberus, Kimco Realty, Klaff Realty, Lubert-Adler Partners and Schottenstein Real Estate.
AB Acquisition will buy the stock of New Albertsons (NAI), which owns the Banners, for $100m in cash with the assumption of about $3.2bn in debt, which will be retained by NAI, the companies said in a statement released on Thursday.
As part of the deal, which includes 877 stores across the Banners, AB Acquisition-owned Albertson’s will reunite its Albertson’s stores with the acquired NAI Albertsons stores.
In addition, a newly-formed acquisition entity owned by a Cerberus-led investor consortium, known as Symphony Investors, will conduct a tender offer within the next ten days for up to 30 per cent of Supervalu’s outstanding common stock priced at $4 per share in cash.
The offer represents a 50 per cent premium to Supervalu’s thirty-day average closing share price as of January 9 2013, and provides the company’s shareholders with the opportunity to maintain an equity stake in Supervalu moving forward.
The deal follows a protracted sale process involving some of the world’s largest buyout houses, including KKR, TPG Capital and Yucaipa, the investment vehicle of US billionaire Ron Burkle.
The 135-year-old retail and food logistics company has seen its market value slump by more than three-quarters since the end of 2010 after competition from discount stores and increased running costs led to losses of more than $2.5bn over the last two financial years.
Cerberus has also completed deals with Supervalu in the past, including the purchase of 655 Albertsons stores following Supervalu’s acquisition of Albertsons back in 2006.
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