Yucaipa: If at First You Don’t Succeed, Buy, Buy Again
Most people probably thought the maneuvering was over when Supervalu, CVS and an investment group led by Cerberus Capital Management were chosen as the winning bidders for the Albertsons chain last year.
Of course, most people do not include Yucaipa Companies’ Ron Burkle. Just last week, Supervalu announced the private equity firm had filed its intention to purchase up to 11.6 percent ($680 million) of the wholesale and retail grocer’s common stock.
Yucaipa Companies, which is the largest shareholder in the Pathmark and Wild Oats grocery chains, is known for buying supermarket businesses on the cheap, getting them turned around and reselling at a sizeable profit. That, many assumed, was the company’s plan when it made its bid for Albertsons.
However, having failed in that attempt last year, Yucapia is now turning its sights on the company that prevailed in the bid for Albertsons. What can that mean for Supervalu?
According to a company press release, Supervalu’s CEO Jeff Noddle met recently with Mr. Burkle and was told Yucaipa was only interested in his company “for investment purposes.”
Discussion Questions: What do you make of Yucaipa’s plan to purchase nearly 12 percent of Supervalu’s common stock? What will Ron Burkle’s involvement
likely mean for Supervalu?
- Supervalu Notified of Hart-Scott-Rodino
Filing – Supervalu/Business Wire
- Yucaipa move lifts Supervalu – St. Paul Pioneer Press (free reg. required)