Federal antitrust concerns unraveled Jewel-Osco’s bid to acquire Strack & Van Til stores in a bankruptcy auction this week, paving the way for the chain’s founding family to swoop in with a surprise, winning offer, sources told SN.
As reported previously, Jewel’s offer of $100 million for 19 Strack & Van Til stores was designated as the “stalking horse” going into the auction, which took place on Tuesday as part of the proceedings of the Central Grocers Chapter 11 case. Jewel’s offer, however, was subject to regulatory approval.
According to a source, Jewel dropped pursuit of three of the properties due to Federal Trade Commission concerns. That helped turn the tide toward Indiana Grocery Group, which made a competing offer for all 19 stores Jewel bid for, in addition to an Ultra Foods store in Merrillville, Ind., that was not part of the Jewel offer, and a commissary in Valapariso, Ind., and Strack’s headquarters building in Highland, Ind.
Indiana Grocery Group includes members of the Strack and Van Til families, according to published reports. A price for the winning bid has not yet been disclosed. Strack & Van Til has not responded to SN’s request for comment.
In a statement provided to SN, Jewel said: “While we are disappointed that our bid for the Strack & Van Til stores was not accepted, Jewel-Osco remains committed to our current strategy.”
A spokeswoman for Albertsons LLC, Jewel’s parent company, had no further comment.
It was unclear on Thursday whether Albertsons would be eligible for a $500,000 break-up fee that was part of its stalking horse offer.
A hearing on the sale of Strack & Van Til will be held next week in U.S. Bankruptcy Court in Chicago.
Strack & Van Til was 80-percent owned by the cooperative distributor Central Grocers, which filed for bankruptcy protection in May with the intention of winding down operations.
Central Grocers’ warehouse and two operating stores remain for sale, court papers said.
Associated Wholesale Grocers is expected to take over distribution to Strack & Van Til’s stores.
