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Strack bid: $72.7M plus inventory

Quick closure will save $8M; AWG backing purchase

A last-minute bid for assets in the Central Grocers bankruptcy auction took Jewel Food Stores by surprise, and after considering the offer, the Albertsons division declined to bid further, court documents filed over the weekend showed.

Indiana Grocery Group, whose backers include members of the Strack and Van Til families that once owned the chain, bid $72.7 million plus inventory for the 19 stores in the “Stalking Horse” package during a July 6 auction. Jewel’s bid of $70 million plus up to $30 million for inventory had been set as the leading bid going into the auction.

Upon hearing the offer, Jewel’s attorneys asked for an adjournment to consider its options, but declined to bid further at the July 11 continuation. Sources last week said that concerns over antitrust issues for three stores in Jewel’s bid may have contributed to its decision not to bid further.

Indiana Grocery Group’s bid also includes an additional $1.7 million for Strack’s Highland, Ind., headquarters, $300,000 for an additional store in Merrillville, Ind., and $2.9 million for warehouse, additional store and private label inventory. The winning bidder will also assume $2.9 million of the debtors’ liability for taxes and can apply a credit of up to $8 million for closing the deal between Aug. 2 and Sept. 11, reflecting expected savings of borrowings under Central’s post-petition credit facility.

Associated Wholesale Grocers, which is expected to supply the new stores, backed the Indiana Grocery Group in its bid.

Indiana Grocery Group includes Strack & Van Til’s CEO Jeff Strack, as well as Frank Van Til, members of the chain’s co-founding families and David Wilkinson, the company’s former CEO. The company had sold itself to supplier Central Grocers in 1997. Central filed for bankruptcy protection in May.

 

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