Reuters – Cerberus Working on Bid for Supervalu

U.S. buyout firm Cerberus Capital Management LP is working with a group of real estate firms on a possible bid for supermarket chain Supervalu Inc., the Wall Street Journal reported on Monday, citing people familiar with the matter. Supervalu is considering a sale after losing customers to competitors like Wal-Mart Stores Inc. and Kroger Co., which has caused the company to close stores and cut costs. The chain is struggling with $6 billion in long term debt and pension liabilities.

(Reuters) – U.S. buyout firm Cerberus Capital Management LP is working with a group of real estate firms on a possible bid for supermarket chain Supervalu Inc , the Wall Street Journal reported on Monday, citing people familiar with the matter.

Supervalu is considering a sale after losing customers to competitors like Wal-Mart Stores Inc and Kroger Co , which has caused the company to close stores and cut costs. The chain is struggling with $6 billion in long term debt and pension liabilities.

People familiar with the matter told Reuters last week that Cerberus is preparing a takeover bid for Supervalu, the third-largest U.S. supermarket chain, with an eye toward selling off the assets.

The Journal said Cerberus was looking to reprise its success with another struggling supermarket chain, Albertsons Inc, six years ago, when it worked with a group of real estate firms and they gained nearly five times their investment. ()

The partners in that deal were Kimco Realty Corp, Chicago’s Klaff Realty LP, Philadelphia’s Lubert-Adler Partners LP and Schottenstein Stores Corp. of Columbus, Ohio, the Journal said.

Cerberus has been in talks to line up $4 billion to $5 billion in debt, with the idea of investing another $800 million to $900 million in equity to take Supervalu private, the Journal reported, citing the source.

The buyout firm was believed to be the only interested party looking to buy Supervalu as a single entity, while others such as Dutch retailer Ahold, C&S Wholesale Grocers and KKR & Co LP were looking at selected assets.

Cerberus could choose to buy only parts of the chain, the Journal said, citing a person familiar with the potential bid.

Supervalu and Cerberus officials were unavailable for comment.