Albertsons sold to investor group
The LLC was created to represent a consortium of investment firms headed by Cerberus Capital Management. Cerberus’ partners in the deal are Kimco Realty Corporation, Klaff Realty LP, Lubert-Adler Partners and the Schottenstein Real Estate Group.
In addition to Albertsons, the consortium is acquiring the Acme, Jewell-Osco, Shaws and Star Market grocery operations, along with their affiliated Osco and Save-On pharmacies. Typically, investors in this sort of transaction acquire distressed properties with an eye to turning them around within a few years and spinning them off profitably.
The deal is valued at $3.3 billion. The investors are putting up $100 million in cash and assuming $3.2 billion in debt.
Within 10 business days, a newly formed entity called Symphony Investors is committed to purchasing up to 30 percent of Supervalu’s stock at $4 a share, a 50 percent premium based on the company’s 30-day average closing price. If Symphony’s offer does not realize at least 19.9 percent of the outstanding shares, Supervalu is committed to issuing sufficient new shares to enable Symphony to reach that mark.
Cerberus focuses on distressed securities and assets, control and non-control private equity investments, commercial lending opportunities and real estate investments. On its website, it says, “The firm has a deep commitment to risk mitigation and asset diversification within each investment strategy.”
Supervalu’s main line of business has traditionally been as a wholesale supplier and distributor of grocery store goods. According to spokesman Mike Siemienas, its divestiture of the grocery operations is slated to close by the end of the first quarter.
“The sale will not immediately affect how we operate the stores,” Siemienas said. “We are going to continue to focus on our customers and continue to have a great experience in our stores.”
The Albertsons chain, based in Boise in its heyday, includes a store located on Linfield College property at 615 S.W. Keck Drive. It is managed by Greg Jolliffe, a 33-year company veteran who came to McMinnville five years ago.
Albertsons opened the 53,000-square-foot store in May 2004 as the anchor tenant in Regency Centers’ McMinnville Market Center development. Lying just across Highway 99W from a Roth’s grocery and Bi-Mart discount house, it includes a Sav-On pharmacy and US Bank branch.
The land was part of almost 100 acres Linfield acquired from Hewlett-Packard in the late 1990s when it closed its McMinnville manufacturing operation. The company sold some of the land to the college and donated the rest, along with the buildings making up its manufacturing complex.
The acquisition effectively doubled Linfield’s holdings. With the help of the Keck Foundation and other donors, it converted the former H-P complex into what is now known as the Keck Campus.
Regency sold its ground lease interest to McMinnville Market Centers LLC in 2006. The principal in the LLC is Washington businessman Alfred Leenstra.
There are currently two vacant sites in the center, which is managed by Barnard Commercial Real Estate. Snap Fitness has recently announced plans to open a 24-hour fitness center in one.