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Supervalu Buyout Talk Heats Up

“The company has received a number of indications of interest and is in active dialogue with several parties.” — Mike Siemienas, a Supervalu spokesman

MINNEAPOLIS — The two Albertsons chains — separated since the 2006 breakup of the banner — could be reunited, according to reports last week.

Cerberus Capital Management, which had led the acquisition of 655 Albertsons stores as part of the previous sale of that company, is interested in buying the Albertsons stores now owned by Supervalu, Reuters reported last week.

According to those reports, Cerberus is seeking to raise $4 billion to $5 billion in debt financing to buy all of Minneapolis-based Supervalu, after which it would seek to sell most of the diversified company’s various retail and wholesale operations to other interested parties.

Cerberus continues to own Albertsons LLC, the Boise, Idaho-based entity that operates about 205 Albertsons stores in various markets. Supervalu operates more than 1,000 traditional retail stores under various banners, including some 564 Albertsons locations.

According to both the Reuters report and a separate report in the Wall Street Journal, investment firm Kohlberg Kravis Roberts & Co. is interested in Supervalu’s St. Louis-based Save-A-Lot discount banner, and C&S Wholesale Grocers is interested in buying Supervalu’s far-flung distribution assets.

KKR declined to comment on that report, and C&S did not return calls seeking comment. Other investment firms said to have expressed interest in Supervalu include TPG Capital and Yucaipa Cos., the firm run by supermarket investor Ron Burkle that now owns Montvale, N.J.-based A&P.

Banners 'Attract Interest'

In addition, Reuters reported that Amsterdam-based Ahold is interested in acquiring Supervalu’s Shoppers Food & Drug banner in the Baltimore market. The article also said that Supervalu’s Jewel-Osco division in Chicago “has attracted interest,” but did not indicate who the interested parties might be. Analysts have previously speculated that Cincinnati-based Kroger Co. could consider a bid for Jewel, which is regarded as one of Supervalu’s strongest assets.

Mike Siemienas, a Supervalu spokesman, told SN that “the company’s previously announced review of strategic alternatives is proceeding. The company has received a number of indications of interest and is in active dialogue with several parties.”

More news: Supervalu Slows Price Cuts, Posts Loss

Supervalu in July said it has retained Greenhill & Co. and Goldman Sachs Group to evaluate the possible sale of all or parts of the company, following years of declining sales and market share at its traditional supermarkets.

Supervalu’s stock jumped about 40% following the reports, boosting its market capitalization to about $638 million late last week. The company also has some $6.3 billion in debt.

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