Report: Pathmark Puts Out For Sale Sign

Oct 27, 2004
George Anderson

By George Anderson

A report in The Star-Ledger newspaper says Carteret, NJ-based Pathmark has hired the investment bank Dresdner Kleinwort Wasserstein to find a buyer for the 142 store chain.

Speculation of a possible sale comes on the heels of the grocery chain lowering its earnings guidance downward for the third time over a five-month period.

Analysts believe the combination of a low stock price, $3.85 at the close of trading yesterday, combined with valuable real estate assets will make Pathmark attractive to potential buyers.

Among those being rumored as possible suitors are the supermarket chains Albertsons, Kroger, Delhaize and Safeway as well as the private investment firms Kohlberg, Kravis, Roberts and Yucaipa.

Moderator’s Comments: What is the best case scenario for a sale of the Pathmark chain? What challenges will a new
owner have to face?

As most probably remember, Pathmark had a deal to sell to Ahold a few years back and that fell through because of antitrust concerns.

Whoever buys it will have to deal with factors Ahold wouldn’t have had to at the time it was looking to take over Pathmark, namely the growth of powerhouse
retailers such as Wal-Mart and Wegman’s to the markets served by the supermarket chain.

George Anderson – Moderator

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