Albertson’s considering consortium’s buyout offer

BOISE – The group that tried to buy Albertson’s Inc. late last year – a deal rejected by the company’s board – was reportedly close to reaching a deal Sunday for the nation’s second-largest supermarket chain.

The Boise-based chain was considering an offer from a group of companies and investment firms for at least $9.6 billion in cash and stock, the New York Times and the Wall Street Journal reported in today’s editions.

The consortium includes the Rhode Island-based CVS drugstore chain; Minnesota-based Supervalu supermarkets; Cerberus Capital Management, an investment fund; and Kimco Realty, a real estate investment company.

Supervalu and Albertson’s disclosed Friday that talks had resumed after the group approached the company last week with a modified proposal. Albertson’s did not return telephone calls from the Associated Press on Sunday.

Albertson’s shares fell more than 10 percent after the company announced it had ended the December talks.

Some shareholders called for the resignation of Albertson’s chief executive, Larry R. Johnston, a former General Electric executive who was brought in to revive the business.

Under the new proposal, the buyers plan to break Albertson’s into three parts – splitting the supermarket business in two and merging the drugstore business with CVS, the Times reported.

Supervalu supermarkets was expected to acquire the most attractive stores, and Cerberus Capital and Kimco Realty would take the rest and either resell or revamp them.

The group is expected to pay slightly more than $26 a share in cash and stock, the Times reported, citing people involved in the talks. CVS, Cerberus Capital and Kimco Realty are planning to contribute slightly more than $20 per share in cash, while Supervalu covers the rest in its stock.