business news in context, analysis with attitude

Ahold said yesterday that it has sold its 71-unit Buffalo-based Tops Markets chain for $310 million to Morgan Stanley Private Equity. The deal, which has been speculated about since Ahold started a strategic review of its holdings almost a year ago, is expected to close before the end of the year.

Reports say that Morgan Stanley worked closely with former Tops CEO Frank Curci in getting the deal done, and that Curci will both serve on the board and run the transition team.

Ahold sold its U.S. Foodservice division in July for $7.1 billion, and has combined the operations of its Stop & Shop and Giant divisions in the quest for greater efficiency.

This marks Morgan Stanley’s first foray into the grocery business, according to reports.

"Tops is a well-regarded grocer with attractive long-term performance, strong employee relationships and a loyal customer base," said Gary Matthews, Managing Director and Operating Partner, Morgan Stanley Private Equity, in a prepared statement. "We are excited to continue Tops' tradition of outstanding service to customers and to maintain its position as a leading supermarket in the region."
KC's View:
That’s what they all say.

The question is, will Morgan Stanley confuse efficiency for effectiveness and make cuts that will render Tops even less able to compete effectively? Because if Morgan Stanley is looking to flip the chain and sell it in a couple of years, that’s often the way it works….and the folks who work for Tops are going to be spending a lot of time waiting for the other shoe to drop.