ANALYSTS: AHOLD OUT OF ACQUISITION MARKET

ZAANDAM, Netherlands -- The bankruptcy of its Latin American partner will not only cost Ahold here millions of dollars, but is also likely to keep the Dutch retailer from making any further acquisitions in the U.S. market, analysts told SN.David Shriver, London-based managing director for the European food retail sector at Credit Suisse First Boston, said, "It's extremely unlikely any meaningful acquisition

ZAANDAM, Netherlands -- The bankruptcy of its Latin American partner will not only cost Ahold here millions of dollars, but is also likely to keep the Dutch retailer from making any further acquisitions in the U.S. market, analysts told SN.

David Shriver, London-based managing director for the European food retail sector at Credit Suisse First Boston, said, "It's extremely unlikely any meaningful acquisition will be possible this year."

Andrew Wolf, equity analyst, BB&T Capital Markets, Richmond, Va., said, "I would have to doubt that they would be in a position to make an acquisition."

Last month, Argentina-based Velox Retail Holdings, Ahold's joint-venture partner in the Latin American supermarket chain Disco, went into default, a move that Ahold said is likely to cost it $350 million to $450 million.

Also last month, Ahold said it was lowering its expectations on earnings-per-share growth in 2002 from 15% to between 5% and 8%. The company said the decrease did not reflect the expected charge from the Velox bankruptcy, but was the result of generally flat sales in many of its companies.

In the past year, Ahold has been one of the major players in a generally quiet acquisitions scene. Earlier this year, the company closed on its $500 million purchase of 184-store Bruno's Supermarkets, Birmingham, Ala.

More recently, Stop & Shop Supermarkets, Quincy, Mass., an Ahold operating company, attempted to put together a deal with Pathmark Stores, Carteret, N.J., to purchase 31-unit Big V Supermarkets, Florida, N.Y., which was operating under Chapter 11 bankruptcy protection. Although Big V's major creditors originally supported the Stop & Shop plan, they finally opted for the offer put forward by Wakefern Foods, Elizabeth, N.J.

However, Ahold has also consistently said it intends to keep its short-term focus on organic growth. Cees van der Hoeven, Ahold's president and chief executive officer, told SN this spring, "We're still hopeful there are potential situations that may come our way, but it's not like we are aggressively pursuing any new acquisitions at this stage."