RICHMOND, Va. -- Richfood Holdings here said last week it has signed a definitive agreement to acquire Farm Fresh, Norfolk, Va., for $220 million in cash.
nization of the retail chain under Chapter 11 of the U.S. Bankruptcy Code. The deal, which is to involve 44 of 48 Farm Fresh stores, is expected to close early in 1998, subject to approval by the retailer's shareholders and regulatory agencies. Farm Fresh said last week it has commenced solicitation of votes from its shareholders by mailing them copies of a disclosure statement and related plan of reorganization. The voting deadline is Dec. 30, a Farm Fresh spokesman told SN.
No court date has been set for the bankruptcy hearing, he added.
According to Farm Fresh, the definitive agreement includes substantially all operating assets and substantially all operating liabilities, including all of its trade liabilities.
Richfood said the deal excludes assumption of the chain's senior notes or other debt for money borrowed; it also excludes assumption of lease obligations for 20 stores that have been previously closed and four stores scheduled to close prior to the proposed sale.
Besides cash, the purchase price includes the value of assumed capital leases, plus 1.5 million warrants for the purchase of Richfood common stock at an exercise price of $25 per share, with a term of five years after issuance.
The company said the exact amount of the cash purchase price will vary depending on changes in Farm Fresh's working capital and the capital lease obligations assumed by Richfood.
Richfood's retail operations include 17 Metro Food Markets in Baltimore, which were part of its 1996 acquisition of Super-Rite Foods.