Supervalu Inc announced a definitive agreement under which it will sell its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC., reports Business Wire.
AB Acquisition is an affiliate of a Cerberus Capital Management L.P. led investor consortium, which also includes Kimco Realty Corporation KIM -0.05%, Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group.
The transaction is valued at USD 3.3 billion.
The sale will consist of the acquisition by AB Acquisition of the stock of New Albertsons, Inc. a wholly-owned subsidiary of Supervalu, which owns the Banners, for USD 100 million in cash NAI will be sold to AB Acquisition subject to approximately USD 3.2 billion in debt, which will be retained by NAI. As part of the transaction, which includes 877 stores across the Banners, AB Acquisition-owned Albertson’s LLC will reunite its Albertson’s stores with the acquired NAI Albertsons stores.
In addition to the sale, within ten business days, a newly-formed acquisition entity owned by a Cerberus-led investor consortium will conduct a tender offer for up to 30 percent of Supervalu’s outstanding common stock at a purchase price of USD 4.00 per share in cash. The Tender Offer represents a 50 percent premium to Supervalu’s thirty-day average closing share price as of January 9, 2013, and provides Supervalu’s shareholders with the opportunity to maintain an equity stake in Supervalu moving forward.
When the dust settles on Supervalu Inc.’s USD 3.3 billion deal with Cerberus Capital Management, the embattled grocer’s chief executive, Wayne Sales, will exit with USD 12.8 million for about eight months of work.
Sales’ “golden parachute†was disclosed Friday in a federal securities filing in connection with the deal announced earlier this month. Cerberus is buying Supervalu’s four largest supermarket chains, and it plans to purchase up to 30 percent of Supervalu’s stock at USD 4 a share.
Sales was hired last July when former CEO Craig Herkert was terminated abruptly. Sales will leave the Eden Prairie-based company after the Cerberus deal closes, which is expected before March 31st.
Sales had been the nonexecutive chairman of Supervalu’s board when he was hired as CEO on a two-year contract. Under his agreement, salary and cash bonuses, as well as stock awards, due through those two years are accelerated if there is a “change of control†at Supervalu.
