Stock in Jewel-Osco parent Supervalu soared 13.5 percent Friday on speculation that the company is on the brink of a deal with Cerberus Capital Management.
Shares for the Eden Prairie, Minn-based grocery company closed at $2.94.
Supervalu spokesman Mike Siemienas said the company is in talks with several suitors, though a deal is not assured. A representative for Cerberus Capital Management, a New York-based investment firm, declined to comment for this story.
The Eden Prarie, Minn-based company, which also owns Albertsons, Cub, Acme and Save-A-Lot stores, said it was exploring strategic alternatives, including a sale, in July. Days later, Supervalu dismissed CEO Craig Herkert, and Chairman Wayne Sales stepped in to run the troubled grocer.
Supervalu sales and earnings have lagged those of competitors for years. In 2012, the company's stock price fell 69.6 percent and return on investment declined 68.6 percent, according to Bloomberg. Average stock prices in the broader consumer staples market rose 7.4 percent and returns gained 10.7 percent in the period.
For the fiscal year ended Feb. 25, Supervalu reported a loss of $1.04 billion, which included a $519 million operating loss and $509 million in interest expense. Sales declined 3 percent, to $27.9 billion. The company has carried an onerous debt load since buying Albertsons, which included Chicago's Jewel-Osco chain, in 2006, making Supervalu the subject of bankruptcy speculation.
Cerberus is rumored to be in the mix to buy parts of the company. The firm has experience in the food retail sector and was an investor in the 2006 Albertsons deal. Cerberus still holds a stake in Albertsons and Strategic Restaurants, a Burger King franchisee with more than 250 restaurants.
eyork@tribune.com | twitter: @emilyyork
SVU data by YCharts
SVU data by YCharts
Shares in Jewel parent soar on report of deal
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Shares in Jewel parent soar on report of deal
