CHICAGO — A Cerberus Capital Management LP-led investor group agreed to acquire Supervalu Inc.’s Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market grocery stores in a transaction valued at about $3.3 billion.
Cerberus also will lead a group to conduct a tender offer to buy as much as 30 percent of Supervalu’s common stock for $4 a share in cash, the companies said Thursday in a statement. After the transactions are completed, Sam Duncan, the former chairman and chief executive officer of OfficeMax Inc., will become CEO of Supervalu, replacing Wayne Sales, the companies said.
The third-largest U.S. grocery chain has eliminated jobs and accelerated price cuts at stores as it struggles to keep pace with discounters including Walmart and Target. Supervalu sales have fallen for three straight years. “For Supervalu, especially the remaining business, there’s no signs at all of stabilization,” Scott Mushkin, an analyst at Jefferies & Co. in New York, said. “Save-A-Lot has deteriorated” and margin is narrowing in the company’s distribution business, he said. The remaining business will be less capital-intensive to run because some Save-A-Lot locations are operated by licensees.
The company Thursday reported that revenue fell 5 percent to $7.91 billion in the three months ended Dec. 1, according to a separate Supervalu statement. Sales dropped at its traditional retail food banners and at Save-A-Lot locations, it said.
The sale leaves Supervalu with the Save-A-Lot chain, the company’s largest with about 1,300 stores across the country, as well as the Cub, Farm Fresh, Shoppers, Shop ’n Save and Hornbacher’s regional chains. It also has a wholesale business that distributes groceries to food retailers.