SUPERVALU (SVU) Announces The Sale Of 5 Chains, A Tender For 30% Of Its Stock, and 3rd Quarter Earnings

SUPERVALU Inc. (NYSE:SVU) today announced an agreement to sell five of its large retail grocery store chains – namely Albertsons, Acme, Jewel-Oscow, Shaw’s and Star Market – and related Osco and Sav-on in-store pharmacies to an affiliate of Cerberus Capital Management L.P. in a transaction valued at $3.3 billion.

In addition, a newly formed acquisition entity, owned by an investor consortium led by Cerberus, will launch a tender offer for up to 30% of SUPERVALU’s outstanding common shares at a 50% premium compared to SVU’s thirty-day average closing price for the period ended January 9th. SUPERVALU notes that this sale of a minority interest provides shareholders with the chance to maintain a stake in the company going forward.

The transactions, which are expected to close in the first quarter of this year, are subject to customary closing conditions, plus the refinancing (fully underwritten) of certain SUPERVALU debt. And the closing of each transaction is conditional upon the success of the other.

Following the transactions, current SUPERVALU President, CEO and Chairman Wayne Sales will be replaced as President and CEO by retail veteran Sam Duncan. Robert Miller, representing the Cerberus side of the deal, will become Non-Executive Chairman of the Board.

In the announcement, Mr. Sales was quoted as saying “The transactions announced today represent the successful culmination of the in-depth strategic review process we commenced this past summer. Following the Sale, SUPERVALU will have three strong, market-leading business units with more consistent cash flows and improved EBITDA growth potential. Symphony Investors’ tender offer provides our shareholders with an attractive premium to recent trading values of our shares and they will acquire an equity stake in a newly refocused SUPERVALU with solid long-term prospects. At the same time, the stores being sold to AB Acquisition are complementary to Albertson’s LLC’s current operations, which are focused primarily on traditional retail grocery.”

SUPERVALU also released financial results for its third fiscal quarter ended December 1, 2012. Earnings were $16 million, or $0.08 per diluted share, compared to a loss of $750 million, or $3.54 per diluted share, in the comparable prior year quarter. Sales in the quarter were $7.9 billion, compared to $8.3 billion in the prior year.

About SUPERVALU Inc. (Source: The Company)
SUPERVALU Inc. is one of the largest companies in the U.S. grocery channel with annual sales of approximately $35 billion. SUPERVALU serves customers across the United States through a network of approximately 4,350 stores composed of 1,068 traditional retail stores, including 778 in-store pharmacies; 1,329 Save-A-Lot stores, of which 946 are operated by licensee owners; and 1,950 independent stores serviced primarily by the Company’s food distribution business. SUPERVALU has approximately 125,000 employees.

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