Directors of Safeway Stores on Tuesday rejected as "inadequate and not in the best interests of the company and its stockholders" a $58-per-share takeover offer by Dart Group. But they said they are exploring "alternatives to enable stockholders to realize the full value inherent in the company."
Those alternatives, Safeway said, include a leveraged buyout, a restructuring and even a friendly merger with Dart.
On the other hand, the Oakland-based company said its board needs more time to "properly evaluate" a separate $64-per-share offer made Monday by Dart, a discount retailing and real estate concern controlled by the Haft family of Washington. Dart said that its $64-per-share offer depends on Safeway's viewing it as a friendly transaction and that the $58-per-share hostile offer launched July 9 remains in force.
The original offer is valued at $3.54 billion, while the sweetened offer is worth $3.9 billion.
Safeway--the Big Board's second most actively traded stock Tuesday with 3.2 million shares changing hands--rose $2.62 1/2 to close at $60.62 1/2.
There was no immediate comment from Dart on the Safeway announcement, which came after the market closed.
Safeway said its representatives have discussed a possible leveraged buyout with a third party, which its spokesman declined to identify. Under a leveraged buyout, a company is purchased with borrowed funds secured by the assets of the company, and the money is paid back with cash generated by corporate operations or by selling assets.