Breaking SuperValu News
Posted in the Minneapolis Forum
#1 Oct 22, 2012
Supervalu shares spike on report of Cerberus buyout attempt
Supervalu Inc. shares skyrocketed more than 30 percent Monday on a report that private equity firm Cerberus Capital Management was trying to arrange up to $5 billion in debt financing to take over the grocer.
Cerberus is talking to a handful of banks, including JP Morgan Chase & Co.(NYSE: JPM) and Bank of America (NYSE: BAC), about arranging $4 billion to $5 billion in debt financing, according to Debtwire, which cited five sources familiar with the situation.
Also Monday, Carla Casella, a debt analyst for JP Morgan, said there was a 50 percent chance that Supervalu would be acquired through a leveraged buyout. She upgraded the company's bonds from "underweight" to "neutral," according to StreetInsider.com .
"We are upgrading the credit from Underweight to Neutral as we believe the solid liquidity and now potential interest in the business will support the bonds," Casella wrote.
Supervalu (NYSE: SVU) shares traded up as much as 38 percent from Friday's close of $2.19. It was selling up about 30 percent, at $2.88, during midday trading.
New York-based Cerberus has been considered a front-runner to buy Eden Prairie-based Supervalu. It also is supposedly talking with Richard Schulze about helping him buy out Best Buy Co. Inc.
Supervalu's shares also rose Thursday when it confirmed it was talking to several parties about buying all or part of the company, although Supervalu didn't say who.
Supervalu, one of the nation's largest grocery chains, put itself up for sale in July, saying it would consider selling all or part of the company. The company hired a new CEO (Wayne Sales), who then made several other management changes in August. Last month Supervalu said it was closing 60 underperforming stores, but none in Minnesota.
#2 Oct 22, 2012
This company will be broken apart though
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