PORTLAND, Ore. (FNS) -- Kienow's Food Stores, a 12-unit operation based here, is up for sale and company president Alan Jones said he has discussed a possible acquisition with Quality Food Centers, Bellevue, Wash.
Jones said Kienow's has retained a financial adviser to evaluate all options for satisfying the will of the late president of Kienow's, Juan Young. The sale must be completed this year, according to a settlement agreement among heirs.
A QFC spokeswoman said the chain would not comment on the situation.
The recent purchase of QFC by another Portland-based chain, Fred Meyer Inc., adds color to the situation but doesn't prevent the purchase, according to Jones. QFC plans to open its first two Portland stores this spring and about a dozen more by 2000, both by construction and acquisition, it has said.
Jones said he doesn't have any idea what the deal would be worth, but that such a determination will be made by Macadam Capital Partners, the financial adviser.
Kienow's built a loyal following by emphasizing friendly service. Young, who died in early 1997, had been president since 1942. He left a $21.6 million estate including Kienow's stock worth more than $18 million, according to probate documents. This included about 78% of the shares in the privately held corporation, most of which have wound up in a private charitable foundation trust for the health and welfare of Oregon children.
Grandchildren have sued to have their stock redeemed, and an attorney for the state Department of Justice has filed an affidavit claiming a "vacuum of leadership" endangers the interest of potential beneficiaries of the trust.
The affidavit said that the greatest shareholder value would be realized by selling the company. Ross L. Laybourn Jr., the attorney who filed the affidavit, said there should be $20 million to $30 million in the charitable trust after the sale. Other shareholders, claiming that their shares are subject to redemption, and afraid redemption would drain the assets, agreed to hire a financial adviser to look at more options. The agreement has been sealed by the court.
