Lone Star Puts Bi-Lo On The Block

(Reuters) BI-Lo LLC, a U.S. supermarket chain owned by Lone Star Funds, is up for sale and has drawn interest from strategic and financial buyers, making it the latest private equity portfolio company to go on the block, a source familiar with the matter said on Monday.

U.S. supermarket chains Kroger Co and Publix Super Markets are among potential bidders and are considering buying at least a significant number of BI-Lo stores, the source said.

Greenville, S.C.-based BI-Lo emerged from bankruptcy protection in May after spending a little more than a year there. The company operates 207 supermarkets in South Carolina, North Carolina, Georgia and Tennessee.

Dallas-based Lone Star bought BI-Lo in 2005 for $660 million from Dutch supermarket group Royal Ahold. Ahold had owned the chain since 1977, which was founded in 1964.

Kroger and Publix were not immediately available for comment. Lone Star declined to comment. The source is anonymous because the talks are not public. (Reporting by Paritosh Bansal and Megan Davies; Editing by Phil Berlowitz)