business news in context, analysis with attitude

The Wall Street Journal reports that Cerberus Capital Management is bidding to acquire the 200-store Harris Teeter supermarket chain, though "Cerberus hasn't decided if it would attempt to acquire the entire company or whether it would buy a major piece and leave some part in the hands of public shareholders."

Earlier this year, Cerberus acquired several supermarket chains from Supervalu and is looking to expand further in the category. The story says that if Cerberus is successful in its Harris Teeter bid, it will leave current management in place.

It is unknown if any other companies have made bids for Harris Teeter, or plan to.

According to the Journal, "An acquisition of Harris Teeter would be somewhat of a departure for Cerberus, which has typically sought far more distressed companies. Harris Teeter produces higher margins and offers higher-end goods compared with Cerberus's mostly down market chains.

"But Cerberus sees savings in combining Harris Teeter with the Supervalu business, according to the person familiar with the matter."
KC's View:
I was with them all the way, until that "combining Harris Teeter with Supervalu" line. My first reaction is that combination could screw up both businesses ... but these guys are a lot smarter than I am. We'll see.