Investment firms in the hunt for Albertsons
Investment firms in the hunt for Albertsons
According to widespread news reports, investment firms are lining up to bid for Albertsons. Knowledgeable sources are saying that both the real estate which the company owns and its geographic diversity are attractive characteristics for investment firms.
The private-equity firms of Kohlberg Kravis Roberts & Co., Apollo Advisors LP, Bain Capital LLC, Thomas H. Lee Partners and the Carlyle Group are said to have each submitted an initial bid for Albertsons. A newspaper report in Boise, ID, where Albertsons is headquartered, cited unnamed sources who claimed initial bids were due Sept. 5. Another source estimated the value of the company at as much as $16 billion.
When the story first broke that Albertsons was up for sale, there was much speculation as to who would be potential buyers.
Most analysts said that it is unlikely that a single strategic buyer, such as a competing chain, would bid for the entire operation. But speculation about a strategic buyer seemed to focus on Target or the European-owned retail giant Tesco. There is no indication that either of those firms came in with an initial bid.
The smart money, said many experts, would be on Albertsons selling to an investment firm, which would then break the chain into pieces based on geography and operating units. Others believe the company itself might sell off some chunks of its stores or whole divisions.
All the flurry of activity has led to brisk sale of Albertsons stock. With the news of potential buyers leaking out, the retail giant's stock rose nearly 8 percent on Friday, Sept. 9, to close at almost $25. That represented close to a 20 percent gain in one week since the story of a potential sale first emerged. Though Albertsons didnt announce that it was on the block until Sept. 2, experts are saying that the early bidders must have had advanced knowledge to put together competitive bids so quickly.
Even though initial bids were due Sept. 5, experts have said that this does not mean the bidding is closed to other companies. In fact, one expert said that companies will probably be allowed to submit bids for at least the next few months.
Analysts have said that Albertsons is very attractive as it has profitable drug company divisions as well as numerous supermarket divisions. Its best-known brand names are Albertsons, Sav-on Drug Stores, Jewel Stores, Jewel-Osco and Shaws Supermarkets, which is its most recent purchase.
Albertsons has indicated that it will not comment until a transaction is in the final stages, so all rumors will remain just that.
The private-equity firms of Kohlberg Kravis Roberts & Co., Apollo Advisors LP, Bain Capital LLC, Thomas H. Lee Partners and the Carlyle Group are said to have each submitted an initial bid for Albertsons. A newspaper report in Boise, ID, where Albertsons is headquartered, cited unnamed sources who claimed initial bids were due Sept. 5. Another source estimated the value of the company at as much as $16 billion.
When the story first broke that Albertsons was up for sale, there was much speculation as to who would be potential buyers.
Most analysts said that it is unlikely that a single strategic buyer, such as a competing chain, would bid for the entire operation. But speculation about a strategic buyer seemed to focus on Target or the European-owned retail giant Tesco. There is no indication that either of those firms came in with an initial bid.
The smart money, said many experts, would be on Albertsons selling to an investment firm, which would then break the chain into pieces based on geography and operating units. Others believe the company itself might sell off some chunks of its stores or whole divisions.
All the flurry of activity has led to brisk sale of Albertsons stock. With the news of potential buyers leaking out, the retail giant's stock rose nearly 8 percent on Friday, Sept. 9, to close at almost $25. That represented close to a 20 percent gain in one week since the story of a potential sale first emerged. Though Albertsons didnt announce that it was on the block until Sept. 2, experts are saying that the early bidders must have had advanced knowledge to put together competitive bids so quickly.
Even though initial bids were due Sept. 5, experts have said that this does not mean the bidding is closed to other companies. In fact, one expert said that companies will probably be allowed to submit bids for at least the next few months.
Analysts have said that Albertsons is very attractive as it has profitable drug company divisions as well as numerous supermarket divisions. Its best-known brand names are Albertsons, Sav-on Drug Stores, Jewel Stores, Jewel-Osco and Shaws Supermarkets, which is its most recent purchase.
Albertsons has indicated that it will not comment until a transaction is in the final stages, so all rumors will remain just that.
