Albertsons Inc. is no longer considering a sale of the entire company, officials said late today.
BOISE, Idaho — Albertsons Inc. is no longer considering a sale of the entire company, officials said late today after CVS Corp. withdrew from talks to acquire the Sav-on and Osco drug chains.
The nation’s second-largest grocery store company said it will continue talks with “several parties” interested in buying its underperforming divisions but had not gotten an offer it deemed suitable.
CVS, a Rhode Island-based company that has more than 5,400 retail and specialty pharmacy stores nationwide, had canceled a planned conference call with analysts this morning after reports that Albertsons had ended talks with a group of investors on selling the company.
Dave Parker, Albertsons vice president of investor relations, said in a telephone interview that the Boise-based company decided against selling the whole company because it had not received a bid it found acceptable. He declined to elaborate on the talks or say who else had expressed an interest in Albertsons assets.
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The New York Times cited unidentified sources Thursday in saying Albertsons broke off negotiations Wednesday night with a group of investors bidding for the company.
The newspaper said the group had been the leading bidder in an auction to buy the supermarket chain for approximately $9.6 billion in cash and stock, or about $26 per share. The group consisted of CVS, Minnesota supermarket chain Supervalu Inc., the New York investment fund Cerberus Capital, and New Hyde Park, N.Y.-based real estate investors Kimco Realty Corp., according to the newspaper.
According to the report, Albertsons board was considering selling some underperforming stores and its pharmacies, using the proceeds to recapitalize.
Albertsons is No. 2 behind Kroger Co., with about 2,500 stores including Albertsons, Acme, Shaw’s, Jewel-Osco and Sav-on Drugs.
The company announced Sept. 2 it was interested in pursuing “strategic alternatives” to increase shareholder value and launched a three-month auction to accept bids on the chain. Albertsons has struggled due to an extended period of lagging sales results, a stagnant share price and competition from lower-cost rivals such as Wal-Mart Stores Inc.
Albertsons shares fell 82 cents, or 3.4 percent, to close at $23.28 Thursday on the New York Stock Exchange, while CVS shares fell 45 cents, or 1.6 percent, to close at $27.13.