LA HABRA, Calif. -- Food 4 Less Supermarkets here said last week it is oversubscribed on two bond issues totaling $450 million it will offer for sale next week.
The consummation of the bond offering will be the final step in the $1.5 billion merger between Food 4 Less and Ralphs Grocery Co., Compton, Calif., which is scheduled to be finalized June 14.
The merger will create a company -- to be called Ralphs -- that will operate about 332 supermarkets in southern California, including the area's largest price-impact chain under the Food 4 Less name and the second-largest conventional chain under the Ralphs name.
Separately, Ralphs Grocery Co., which issued preliminary sales figures for the first quarter in mid-May, disclosed earnings results last week for the 12-week quarter ended April 23.
Net earnings fell 41.7% to $4.9 million, compared with $8.4 million a year earlier -- a decline the company said was due largely to union health and welfare benefit credits that were recognized in the prior year's first quarter.
Operating income for the quarter fell 8.8% to $31.3 million from $34.1 million a year ago.
As previously reported, sales for the quarter fell 3.5% to $637.5 million; same-store sales fell 2.2%, and cash flow fell to 8.2% of sales from 8.6% in the prior year.
As of last Tuesday, the day the bonds were priced, Food 4 Less had received $850 million worth of orders on $350 million of senior notes priced at 10.45% and about $300 million worth of orders on $100 million of subordinated notes at 11%, a company spokesman said.
He said it will be up to the lead bank in the deal, Bankers Trust, New York, working with Yucaipa Cos., Los Angeles, to determine which bidders will be able to buy bonds.
Yucaipa, parent of Food 4 Less, has already lined up a $750 million term loan with a group of banks headed by Bankers Trust.
