The Detroit Free Press reports that Spartan Stores has decided to take a pass on the acquisition of the 70-unit Farmer Jack chain from the Great Atlantic & Pacific Tea Co. (A&P).
Farmer Jack was put on the market by A&P last May, and most of the speculation about possible buyers centered on Spartan.
In a statement released by Spartan, it said that after lengthy consideration, it has decided not to make any acquisitions and instead stay with the strategic direction plotted out by management.
“During a nine month period, assisted by Bear, Stearns and with the oversight of the board of directors and its governance committee (which consists entirely of independent directors), Spartan management identified, explored, and evaluated its alternatives,” the company said in a prepared statement. “The strategic alternatives explored included a potential sale of the Company to a strategic or financial buyer and a potential acquisition by the Company of a group of retail stores available in a contiguous market.”
Spartan said that its “current business plan is to pursue retail and distribution sales and earnings growth through improving category management, new store construction and expansions, enhancing retail sales with new fuel centers and pharmacies, expanding its distribution customer base and pursuing opportunistic acquisitions of retail stores owned by existing distribution customers and other operators that fill in the Company's geographic markets.”
Farmer Jack was put on the market by A&P last May, and most of the speculation about possible buyers centered on Spartan.
In a statement released by Spartan, it said that after lengthy consideration, it has decided not to make any acquisitions and instead stay with the strategic direction plotted out by management.
“During a nine month period, assisted by Bear, Stearns and with the oversight of the board of directors and its governance committee (which consists entirely of independent directors), Spartan management identified, explored, and evaluated its alternatives,” the company said in a prepared statement. “The strategic alternatives explored included a potential sale of the Company to a strategic or financial buyer and a potential acquisition by the Company of a group of retail stores available in a contiguous market.”
Spartan said that its “current business plan is to pursue retail and distribution sales and earnings growth through improving category management, new store construction and expansions, enhancing retail sales with new fuel centers and pharmacies, expanding its distribution customer base and pursuing opportunistic acquisitions of retail stores owned by existing distribution customers and other operators that fill in the Company's geographic markets.”
- KC's View:
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Analysts are already speculating that this decision by Spartan might just be a form of hardball – a way of forcing A&P to lower the price on the Farmer Jack stores, and perhaps make other concessions.
In baseball, there is an old truism that often the best trades are the ones that you don’t make…and it could be that this could be the case for Spartan.
