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Kimco stake in Albertsons Cos. shrinks

Apollo set to become new beneficial owner of supermarket company

Russell Redman

June 11, 2020

3 Min Read
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Kimco Realty Corp. has reduced its ownership in Albertsons Cos. from 9.29% to 7.5% with the grocery retailer’s sale of a more than 17% stake in the company to private equity firm Apollo Global Management.Albertsons

Kimco Realty Corp. has reduced its ownership in Albertsons Cos. with the grocery retailer’s sale of a more than 17% stake in the company to private equity firm Apollo Global Management.

A Jericho, N.Y.-based shopping center REIT, Kimco said late yesterday that it received $156.1 million as part of Apollo’s $1.75 billion purchase of Albertsons convertible preferred stock, announced in May. With the move, Kimco’s ownership interest in Albertsons decreased to 7.5% from 9.29%.

Albertsons used $1.68 billion in net proceeds from the sale to Apollo to repurchase about 17.5% of the common stock from current shareholders, based on the preferred stock conversion level, Kimco reported. Plans called for the Apollo transaction to be finalized by June 15, pending customary closing conditions.

Before the transaction with Apollo, Kimco was the only other beneficial owner in Albertsons with at least a 5% stake. Albertsons Investor Holdings LLC, an investment group led by private equity firm Cerberus Capital Management (and also including Kimco), previously held more than 90% of the grocery retailer.

Kimco said last month that it would partially monetize its investment in Albertsons in connection with the Apollo deal.

“Our shareholders continue to benefit from the company’s Albertsons investment, especially at a time when liquidity remains paramount,” Kimco CEO Conor Flynn said in a statement at the time. “Our Albertsons investment continues to be the hallmark of Kimco’s Plus business, which has a long and successful history of investing in real estate-rich retailers and other companies. With our remaining 7.5% residual ownership interest in Albertsons, this investment will further benefit our shareholders well into the future while strengthening and diversifying Kimco’s balance sheet.”

Related:Albertsons to sell company stake to Apollo

Kimco has held an interest in Albertsons since 2006, when a Cerberus-led investment group acquired 661 Albertsons supermarkets from Albertsons Inc. Kimco invested about $51 million in that transaction. Then in 2013, the investment group purchased the remaining Albertsons stores — plus the Jewel-Osco, Acme, Shaws and Star Markets supermarket banners — from Supervalu for $3.3 billion, in which Kimco invested another $37 million. At the time, Kimco bought $33.6 million of Supervalu common stock, later selling those share for $74 million. The consortium then acquired Safeway in 2015, with Kimco investing $85.3 million. Kimco said it received more than $300 million in cash distributions from those investments in Albertsons, including proceeds from the Supervalu stock sale.

Related:Grocery giant Albertsons files for IPO as sales continue to grow

Kimco is one of North America’s largest publicly traded owners and operators of open-air, grocery-anchored shopping centers and mixed-use developments. As of March 31, the company owned interests in 401 U.S. shopping centers and mixed-use properties.

Boise, Idaho-based Albertsons unveiled the agreement with Apollo just over two months after filing for an initial public offering. The IPO filing with the Securities and Exchange Commission came not long after news reports said the supermarket giant was looking to go public.

As of its 2019 fiscal year-end on Feb. 29, Albertsons had 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.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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