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Private equity interest heralds likely Supervalu breakup

25 Oct 2012

Cerberus Capital Management has emerged as the only private equity firm interested in buying supermarket giant Supervalu as a single entity.

Buyout giants KKR and TPG Capital and billionaire Ron Burkle are all believed to be interested in parts of the ailing retail chain according to Bloomberg, which said the interest so far heralded an eventual break-up of the company.

Supervalu is believed to favour a sale of the entire company but will consider being taken apart piecemeal if it will fetch a higher price.

A takeover by turnaround investor Cerberus could see the firm take responsibility for hiving off parts of the company itself, with other parties interested in the company’s assets including Dutch retailer Ahold and C&S Wholesale Grocers.

The 135-year-old retail and food logistics company has a network of more than 2,400 stores across the US.

But the chain’s market value has slumped 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 is also believed to be among at least four private equity firms conducting due diligence for a possible $11bn buyout of electronics retailer Best Buy.

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