Supervalu Sells Fuel Centers

MINNEAPOLIS — Supervalu said Wednesday it is selling 107 of its 134 fuel centers to four separate buyers. Supervalu said the sales will allow it to monetize non-core assets, creating capital the company can use to further strengthen its business. The transactions, expected to close in the fall, include partnership opportunities that will enable Supervalu to continue to have the ability to offer fuel

MINNEAPOLISSupervalu [4] said Wednesday it is selling 107 of its 134 fuel centers to four separate buyers.

Supervalu said the sales will allow it to monetize non-core assets, creating capital the company can use to further strengthen its business. The transactions, expected to close in the fall, include partnership opportunities that will enable Supervalu to continue to have the ability to offer fuel rewards programs at existing fuel centers and through an expanded network of fuel centers.

John Heinbockel, managing director for Guggenheim Partners, New York, estimated proceeds from the sale could be $75 million to $100 million, which he said is likely to be used to pay down the company's revolver. “This will improve Supervalu's balance sheet, but it is unlikely to materially impact EBITDA or core operations,” he said.

Karen Short, an analyst with BMO Capital Markets, New York, estimated each location could generate sale proceeds of approximately $500,000 — allowing for a discount because the real estate is not owned by Supervalu — for an estimated total of $50 million to $60 million.

The buyers are as follows:

  • • Tesoro Corp., San Antonio, which will purchase 51 Albertsons fuel centers n California, Nevada, Oregon, Utah, Washington, Wyoming and Idaho.

  • • Alimentation Couche-Tard, Laval, Quebec, and its Circle K stores, which will purchase 27 Jewel-Osco fuel centers, primarily in the Greater Chicago area.

  • • Holiday Stationstores, Brainerd, Minn., which will purchase 15 fuel centers — eight from Cub Foods in Minnesota, two from Hombacher's in North Dakota and five from Albertsons in Montana.

  • • Stinker Stores, Boise, Idaho, which will purchase 14 fuel centers from Albertsons in Southern Idaho.

The moves follow Supervalu's sale of other retail assets in the last two years, including the Bigg's chain in Cincinnati, the Bristol Farms banner in California and its Shaw's locations in Connecticut.

For more on Supervalu see the news story Supervalu's Hyper-Local Initiative Enlists Store Managers [5] and the story on the SN Analysts Roundtable [6].