Owners of Polish retail chain Zabka tap JPMorgan for $1.1 billion sale, say sources: Reuters

Private equity firm Mid Europa Partners is pressing ahead with the sale of its Polish convenience chain Zabka Polska and has asked JPMorgan to handle negotiations with prospective bidders, sources familiar with the matter said.

A sales process is expected to kick off towards the end of the year, the sources said, adding that Western buyout funds and industry players have expressed interest in the business, which runs more than 3,000 stores in Poland.

Mid Europa Partners and JPMorgan declined to comment.

Reuters exclusively reported on May 6 that Mid Europa Partners was exploring the sale of Zabka in a deal which valued the Poznan-based business at about 1 billion euros ($1.10 billion).

London-based Mid Europa Partners, which focuses on central and eastern European investments, bought the company in 2011 for 400 million euros. It aims to complete the sale by the end of the first half of 2017, one of the sources said.

Poland’s biggest wholesale chain Eurocash is reviewing a possible offer, one of the sources said, cautioning that no deal was certain.

Private equity funds including London-based CVC Capital Partners are also expected to join the race, another source said, adding that Eurocash may face antitrust issues if seeking to take control of Zabka.

Eurocash declined to comment while CVC was not immediately available for comment.

Zabka had sales of 5.75 billion zlotys ($1.45 billion) in 2015 and says it’s the largest chain of convenience stores in the country, competing with the Portuguese Jeronimo Martins’ Biedronka chain.

Zabka, which operates in Poland under the Zabka and Freshmarket brands, serves around 800,000 customers per day.