Roundy’s Makes $118.5 Deal for 31 Rainbow Foods’ Stores

Discussion
May 06, 2003
George Anderson

By George Anderson


Fleming has accepted Roundy’s offer of $82.5 million for 31 Rainbow Foods stores
in the Minneapolis – St. Paul area. Roundy’s will also pick up the leases on
the Rainbows Foods locations for another $36 million.


The deal will now have to be presented by Fleming to a Chapter 11 bankruptcy
court judge who will decide to accept Roundy’s offer or entertain other bids.


Moderator’s Comment:What will a Roundy’s purchase mean
to the Rainbow Foods stores? Does Roundy’s purchase of the 31 Rainbow Foods
stores mean it is out of the running to buy Dominick’s?


We wouldn’t bet on Roundy’s being out just yet. The Rainbow
Foods purchase will put the wholesaler/retailer in the top 25 chains in the
nation. Landing Dominick’s would increase its leverage with suppliers that much
more. Fortunately, with Bob Mariano at the helm, this won’t be another deal
where efficiency goals come at the expense of sales effectiveness. [George
Anderson – Moderator
]

 

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