Business > Albertson's Considers Sale of Company

Albertson's Considers Sale of Company, Other Alternatives in Face of Lagging Sales

The company which operates about 2,500 stores including Albertson's, Acme, Shaw's, Jewel-Osco and Sav-on Drugs said it is interested in pursuing "strategic alternatives" to increase shareholder value. Albertson's' board retained Goldman Sachs & Co. and Blackstone Group LP as financial advisers.

Albertson's, second only to Kroger Co. among U.S. supermarket chains, said it would not comment on developments until its board approves a definitive transaction.

In June, Albertson's reported first-quarter earnings nearly tripled due to an acquisition and the continued recovery of the Southern California market after a major labor dispute. However, analysts said the company's underlying sales with or without the Southern California stores are still not as good as its main competitors.

At the time the earnings were released, Goldman Sachs analyst John Heinbockel said Albertson's continued lagging sales would put increasing pressure on earnings later in the year, despite cost cuts.

The company is recovering from a 4 1/2-month strike of 59,000 supermarket workers in California. The strike ended Feb. 29 when members of the United Food and Commercial Workers union ratified a contract with Albertson's, Safeway Inc. and Kroger.

Albertson's shares surged $2.32, or 11 percent, to close at $23.05 on the New York Stock Exchange. Its shares have traded in a 52-week range of $19.26 to $25.93.

2005-09-03