Supervalu completes sale of five grocery banners

Supervalu Inc (NYSE: SVU) has completed the sale of its Albertsons, Acme, Jewel-Osco, Shaw’s, and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management LP-led investor consortium.

This stock transaction is valued at $3.3 billion, including $100 million in cash and $3.2 billion in debt assumption. Operations for these banners will transfer overnight, and the new Supervalu has opened for business as a more efficient wholesale and retail company with annual sales of approximately $17 billion.

As part of the transaction, Supervalu also announced that Symphony Investors, a Cerberus-led investor consortium, completed its tender offer resulting in the acquisition of 11,686,406 shares (about 5.475% of Supervalu’s outstanding common stock) at a purchase price of $4 per share in cash. In addition, pursuant to the terms of the transaction, the company issued 42,477,692 million new shares of common stock (about 19.9% of the outstanding shares) to Symphony Investors at a purchase price of $4 per share in cash to the company, or approximately $170 million. The tender offer and primary stock issuance establish Symphony Investors as Supervalu’s largest shareholder with 21.2% of total outstanding common shares.

Robert Miller, president and chief executive officer of Albertsons LLC, becomes Supervalu’s new non-executive chairman of the board. He replaces Wayne Sales, who has served as executive chairman since August 2012.

Sales will remain on the board as a director along with four other current board members: Donald Chappel, Irwin Cohen, Philip Francis, and Matthew Rubel. As previously agreed upon, five directors have voluntarily resigned from the board: Ronald Daly, Susan Engel, Edwin “Skip” Gage, Steven Rogers, and Kathi Seifert.

Lenard Tessler, a designee of Symphony Investors, also was appointed to the Supervalu board of directors. He serves as co-head global private equity and senior managing director of Cerberus Capital Management.

With the transaction complete, Supervalu now consists of three business units made up of Independent Business, a leading food wholesaler that serves nearly 2,000 stores across the nation; Save-A-Lot, a hard discount grocery chain with more than 1,300 stores; and Supervalu’s five regional retail banners: Cub, Farm Fresh, Shoppers, Shop ‘n Save, and Hornbacher’s.

For more information, visit www.supervalu.com.