business news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary...

• The Denver Business Journal reports that there is speculation in the investment community that Safeway could be a takeover target = and that Kroger is a potential suitor.

According to the story, “Safeway’s heavy debt load and pension obligations could be hurdles to a buyout. And Wall Street participants have long speculated that Safeway could spin off its successful Blackhawk Network prepaid card business. Blackhawk sold more than $6 billion worth of prepaid cards through 80,000 retail sites in 2011, taking a small commission on each.

“Any Safeway buyout will leave some feeling like they’ve seen this movie before. The grocer was acquired in a hotly contested leveraged buyout by KKR in 1986. The grocer’s robust cash flows and real estate holdings would be attractive to private equity firms, which are sometimes called financial buyers.”

I’m no expert at such things, but I simply cannot imagine that Kroger could buy Safeway without creating all sorts of antitrust problems, which would result in a large part of the company being sold off. If I’m wrong, though, I’m sure folks in the MNB community will point it out...

• The St. Louis Business Journal reports that Schnuck Markets plans to open two new stores in Springfield, Illinois, which will double its presence in the area.

Schnuck Markets currently operates 100 stores and 95 in-store pharmacies in Missouri, Illinois, Indiana, Wisconsin and Iowa.

• The Associated Press reports that “CVS Caremark Corp. will pay nearly $14 million to settle California claims that it illegally disposed of hazardous waste at California stores ... The $13.75 million settlement will be shared by prosecutors, fire and environmental health departments from some 45 cities and counties.”
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