Albertsons Cos. today made its debut as a public company, with shares trading on the New York Stock Exchange (NYSE) under the “ACI” ticker symbol.
Boise, Idaho-based Albertsons said late yesterday that its initial public offering (IPO) priced at $16 per share for 50 million shares of common stock, or $800 million. That represented a downsized offering from when the company launched the IPO on June 18. In its amended S-1 filing with the Securities and Exchange Commission, Albertsons said it planned to offer 65.8 million shares at an estimated price of $18 to $20 per share, for a total of $1.18 billion to $1.32 billion.
The $16-per-share IPO values Albertsons at approximately $9.3 billion, published reports said, excluding long-term debt of nearly $8.5 billion as of the close of the company’s 2019 fiscal year at the end of February.
Albertsons said the IPO is expected to close on June 30, pending customary closing conditions. All of the shares are being sold by certain company stockholders, which also have granted the underwriters a 30-day option to buy 7.5 million shares of common stock. Albertsons reported that the company won’t receive any net proceeds from the sale of common stock.
BofA Securities, Goldman Sachs, J.P. Morgan and Citigroup are acting as lead joint book-running managers for the IPO, with Credit Suisse, Morgan Stanley, Wells Fargo Securities, Barclays and Deutsche Bank Securities as book-running managers.
Albertsons filed a registration statement for an IPO with the SEC on March 6, a couple of months after news reports said the supermarket giant aimed to go public. Two earlier attempts by Albertsons to become public disintegrated. In 2018, the company attempted to go public via a $24 billion merger with Rite Aid Corp., but the deal was terminated after investor pushback. Investors also tried to take Albertsons public after its 2015 merger with Safeway but wound up pulling the offering due to market conditions for retail stocks.
Albertsons is owned by an investment group led by private equity firm Cerberus Capital Management. Last month, the grocery retailer unveiled plans to sell a more than 17% stake in the company to private equity firm Apollo Global Management. Funds managed by Apollo affiliates agreed to buy $1.75 billion of Albertsons’ convertible preferred stock. With the repurchase of a portion of common stock owned by current shareholders, Apollo will hold about 17.5% of pro forma common shares outstanding in Albertsons on an as-converted basis.
And last week, Kimco Realty Corp. said it received $156.1 million as part of Apollo’s $1.75 billion purchase of Albertsons convertible preferred stock. With the move, Kimco’s ownership interest in Albertsons decreased to 7.5% from 9.29%. Before the transaction with Apollo, Kimco was the only other beneficial owner in Albertsons with at least a 5% stake.
The nation’s second-largest supermarket operator, Albertsons finished fiscal 2019 with 2,252 food and drug stores in 34 states and the District of Columbia under such banners as Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street and Haggen. The company also operates 1,726 pharmacies, 402 fuel centers, 23 distribution centers and 20 manufacturing plants.