An investment group is close to a deal to buy supermarket chain Albertsons Inc. for about $9.6 billion, The Wall Street Journal reported today.

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BOISE, Idaho — An investment group including Cerberus Capital, Kimco Realty Corp. and Minnesota-based supermarket chain Supervalu Inc. is near a deal to buy Albertsons Inc., the second-largest U.S. supermarket chain, for about $9.6 billion, The Wall Street Journal reported today.

The deal, which the newspaper said was valued at $26 per share, would put an end to a three-month auction for Boise-based Albertsons, which has suffered from lagging results, a stagnant share price and competition from lower-cost rivals including Wal-Mart Stores Inc.

Albertsons shares rose 34 cents, or 1.4 percent, to close at $24.33 on the New York Stock Exchange.

The Journal, which cited unidentified people familiar with the matter for its report, also said Albertsons is continuing separate talks to sell its pharmacy business to CVS Corp., for as much as $4 billion of the overall purchase price.

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“Beyond the Sept. 2 announcement, I have no comment,” said Shannon Bennett, an Albertsons spokeswoman. The company put itself up for sale on that date. She also refused to confirm the newspaper’s report that its board planned to meet this weekend.
The Journal said the transaction could be announced after the board meeting. According to the report, the Cerberus group would assume $6.4 billion in Albertsons debt as part of the deal.

Spokesmen for Cerberus, based in New York, Stamford, Conn.-based Kimco, and Eden Prairie, Minn.-based Supervalu did not immediately return phone calls seeking comment.

Albertsons was founded in 1939 on a downtown Boise street corner by entrepreneur Joe Albertson, who was among the first American grocery retailers to combine supermarkets with drug stores.

Albertsons trails only The Kroger Co., based in Cincinnati, among supermarket-only operators, although the food business of Wal-Mart has eclipsed the both of them in recent years. Albertsons presently has about 2,500 stores in 37 states, with about 240,000 workers. It stores include Albertsons, Acme, Shaw’s and Jewel while its drug stores include Osco and Sav-on Drugs.

In the three months ended Nov. 3, Albertsons missed analyst expectations for a second quarter in a row and reduced its full-year profit outlook, adding to pressure to find a buyer. In the period, net income declined 30 percent to $77 million, from $110 million in the third quarter of 2004.

For the first nine months of the fiscal year, it earned $284 million, or 76 cents a share, up from $249 million, or 67 cents a share, a year ago. Nine-month sales rose to $30.13 billion from $28.76 billion a year ago.