May 31, 2006 in Business

Supervalu, Albertson’s shareholders approve sale

Associated Press The Spokesman-Review
 

MINNEAPOLIS — Shareholders approved the sale of much of Boise, Idaho-based Albertson’s Inc. to Supervalu Inc. on Tuesday, bringing Supervalu closer to its goal of being one of the nation’s largest grocers.

The votes came on the same day that Albertson’s, the nation’s second-largest traditional grocer, reported that first-quarter earnings rose 67 percent, helped by a one-time gain for pension curtailments.

The deal gained approval from 98 percent of voting Albertson’s shareholders and 92.6 percent of Supervalu shareholders. The acquisition is expected to close in June.

Supervalu led a consortium that also included drugstore chain CVS Corp., private equity firm Cerberus Capital Management and others that agreed in January to buy Albertson’s for $9.7 billion in cash and stock, plus assumed debt, bringing the total transaction to about $17.4 billion.

The company said it earned $167 million, or 45 cents per share, for the quarter ended May 4.

That compares with $100 million, or 27 cents per share, for the year-ago period.

Results for the first quarter include a pretax gain of $47 million, or 8 cents per share, for planned pension curtailments approved during the quarter.

Counting only continuing operations, the company earned $166 million, or 44 cents per share, compared with $107 million, or 29 cents per share, in the year ago period.

Sales fell slightly to $9.94 billion from $9.99 billion.

Analysts, on average, expected earnings of 25 cents per share on sales of $10.05 billion, according to a Thomson Financial survey.

Selling, general and administrative expenses fell to $2.46 billion, from $2.52 billion in the year ago period, due to pension curtailments, gains on the sale of fixed assets and lower workers’ compensation expenses.

During the quarter, the company opened eight stores, closed 18 and remodeled 20.

At quarter’s end, a total of 2,461 stores were open.

Shares of Supervalu dropped 23 cents to close at $29.56 on the New York Stock exchange, where Albertson’s shares rose 5 cents to finish at $25.67.

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