Kroger Trading Suggests More Buyout Speculation

A rise in credit default swaps and heavy volume in stock option positions in Kroger Tuesday raised anew reports that the retailer could be the target of private equity interests.

CINCINNATI — A rise in credit default swaps and heavy volume in stock option positions in Kroger Tuesday raised anew reports that the retailer here could be the target of private equity interests. An observer quoted in a Reuters article Tuesday said, “They are possibly in play right now.” Credit default swaps, or the cost to insure Kroger’s debt, climbed by around 4 basis points Tuesday. Similar activity in April initially began speculation that Kroger could be a leveraged buyout candidate. Stock options, or rights to buy stock in Kroger at a determined time and price, also surged by around 10 times their normal volume Tuesday, reports said. David Dillon, Kroger’s chairman and chief executive officer, said last month in a statement to employees that a sale of the chain was not in the works.

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