MINNEAPOLIS -- Supervalu here said it may use the proceeds of $150 million from the sale of its investment in ShopKo Stores to invest in acquisitions in its core wholesale or retail food operations.
opKo said 10 days ago they had reached a definitive agreement under which Supervalu will sell its 46% investment in ShopKo common stock to the discount retailer.
Once the deal has been consummated -- sometime during the summer, the companies said -- Wright said he will give up his position as chairman of ShopKo, and both Wright and Jeff Girard, Supervalu's executive vice president and chief financial officer, will resign from ShopKo's board of directors.
Supervalu acquired ShopKo in 1971; however, it has been seeking a way over the last few years to exit that investment to focus on its core food-retailing operations.
In 1991 it sold 54% of its ShopKo stock in a public offering. ShopKo said in September it was discussing a merger with Phar-Mor, Youngstown, Ohio, that would have included the repurchase of 90% of Supervalu's 14.7 million ShopKo shares; however, talks between ShopKo and Phar-Mor were terminated early in April.
Under the definitive agreement, ShopKo said it will repurchase nearly 8.2 million shares held by Supervalu for a price of $18.35 per share, or approximately $150 million. Conditional with the buyback is an agreement by ShopKo to offer the balance of Supervalu's equity -- more than 6.5 million common shares -- in a secondary public offering at a price at or above $18.35 per share.