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Albertsons Gets Revised Joint Takeover Proposal

The offer comes about four weeks after the supermarket operator rejected a previous bid.

January 21, 2006|From Times Wire Services

Albertsons Inc. has received a revised takeover offer from a group led by Supervalu Inc. and CVS Corp. after turning down a bid last month.

Albertsons said Friday that it had received a new offer from a consortium that had previously made a bid, but didn't name the members of the group. Supervalu confirmed that it was one of the companies that had resumed talks with Albertsons. Cerberus Capital Management and Kimco Realty Corp. are the other companies in the bidding group.

Neither Minneapolis-based Supervalu nor Boise, Idaho-based Albertsons said how much was being offered. CVS didn't respond to a call for comment.

Shares of Albertsons rose 24 cents Friday to $24.11, while Supervalu fell 34 cents to $31.85 and CVS dropped 30 cents to $27.31.

A previous offer -- reportedly valued at about $9.6 billion in cash and stock, or about $26 a share -- fell apart Dec. 22 when the parties were unable to agree on who would be responsible if antitrust regulators tried to block the deal. At that time, Albertsons said it was no longer considering a sale of the entire company.

Albertsons is pursuing a sale amid struggles to compete with discount chains such as Wal-Mart Stores Inc. and supermarket rivals Safeway Inc., operator of the Vons and Pavilions chains, and Kroger Co., which owns Ralphs.

The proposed deal would give discount grocer Supervalu more than 1,100 new stores in urban markets including Chicago and allow CVS to add 700 drugstores, mostly in the West.

The companies may have resolved antitrust concerns that scuttled earlier discussions, said Joseph Phillips, a Redwood Technimentals Research analyst. "There had to be structural changes from the last deal to perhaps address some antitrust issues that may have arisen."

The Wall Street Journal reported Thursday that the new Albertsons deal would be worth $26.18 in stock and cash. That's about $9.65 billion.

New York-based Cerberus may acquire stores in Albertsons' weaker markets such as Phoenix, Dallas and Florida, according to a report in TheDeal.com. CVS, based in Woonsocket, R.I., wants to buy Albertsons drugstores to quicken its expansion into California.

Bloomberg News and Associated Press were used in compiling this report.

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