Rumors abounded yesterday that Albertsons is in what Reuters called "advanced talks" to acquire upstate New York-based Price Chopper for about $1 billion.
The Reuters story says that "a deal would underscore the wave of consolidation sweeping the U.S. grocery industry, as regional chains struggle to compete against online retailers such as Amazon.com, big box stores such as Wal-Mart Stores, and discount chains such as ALDI."
The story goes on: "The sources, who asked not to be identified because the matter is confidential, cautioned that it is still possible for the deal negotiations to fall through. Albertsons and Price Chopper declined to comment.
"Schenectady, New York-based Price Chopper operates roughly 130 stores across the U.S. Northeast, including New York, Connecticut and Massachusetts. Earlier this year, Scott Grimmett took over from Jerry Golub as chief executive of Golub Corp, the Golub family's company. He is the first non-family member to hold that position."
Albertsons is controlled by private equity firm Cerberus Capital Management, and operates more than 2,200 stores around the country under a variety of banners.
The Reuters story says that "a deal would underscore the wave of consolidation sweeping the U.S. grocery industry, as regional chains struggle to compete against online retailers such as Amazon.com, big box stores such as Wal-Mart Stores, and discount chains such as ALDI."
The story goes on: "The sources, who asked not to be identified because the matter is confidential, cautioned that it is still possible for the deal negotiations to fall through. Albertsons and Price Chopper declined to comment.
"Schenectady, New York-based Price Chopper operates roughly 130 stores across the U.S. Northeast, including New York, Connecticut and Massachusetts. Earlier this year, Scott Grimmett took over from Jerry Golub as chief executive of Golub Corp, the Golub family's company. He is the first non-family member to hold that position."
Albertsons is controlled by private equity firm Cerberus Capital Management, and operates more than 2,200 stores around the country under a variety of banners.
- KC's View:
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I could be wrong about this, but I am convinced by my sources that these are just rumors, and that the suggestion that "advanced talks" are taking place is specious.
I've consistently said in this space that I know from personal experience that there are few things that annoy Price Chopper's chairman, Neil Golub, than reports that the company is for sale. (I've been on the wrong end of those phone conversations. Trust me.) The company isn't commenting on these reports, and I think it is because sale negotiations are not taking place. I'll believe that Price Chopper is being sold only when Neil Golub tells me so.
I think that it is a lot more likely that Price Chopper could be soliciting some investment dollars, and wouldn't necessarily be against the idea of taking them from the likes of Kroger or Albertsons. (And this kind of deal, of course, might include some sort of long-term option to acquire the company.) What Price Chopper is trying to do with its conversion to the Market 32 format is both ambitious and expensive, and seeking out some investment capital would seem to make sense.
