August 24, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of grocer SUPERVALU (NYSE: SVU ) were getting snapped up today as they rose as much as 13% in intraday trading after reports that the company's individual chains were receiving buyer interest.
So what: It's no secret that the owner of the Albertsons and Farm Fresh chains has been looking to sell itself as it struggles with a heavy debt load. What's new is Bloomberg's report that the company has seen considerable interest for pieces of its business. Cerberus Capital Management, for instance, may be interested in SUPERVALU's Albertsons business, while Amsterdam's Koninklijke Ahold is a potential buyer for the Shoppers unit.
Now what: As of right now, it doesn't sound like this is what SUPERVALU wants -- it'd rather find a buyer for the entire company and be done with it. The Bloomberg report does, however, make it clear that SUPERVALU has assets that can attract buyers.
For investors, there are a few possibilities ahead. First, the company could still find a buyer for the whole company. A twist on that would be a private equity purchaser stepping in as that one buyer and then working on their own to break the company up into its component parts. Finally, SUPERVALU could decide to sell itself in pieces in the hopes that it's able to find a buyer for everything. The last scenario could be an interesting one for investors, because it's certainly possible that the bankers could get a better price for the parts than the whole. However, it'd also be the most drawn-out and difficult process.
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