Private-equity firm Cerberus Capital Management LP is working to sew up a deal to buy Safeway Inc. this week, though its efforts to do so have been complicated by supermarket giant Kroger Co. , according to people familiar with the matter.
Cerberus already owns the Albertsons supermarkets, and is looking to pair it with Safeway , the nation's second-largest grocery chain, the people said. Cerberus had been hoping earlier this week to lock up a deal by now, the people said.
But Kroger Co. , Safeway's larger rival, is now considering a bid of its own for all or part of Safeway , the people said. Cerberus is still seen as likelier to emerge with a deal for Safeway , in part because of antitrust risk associated with any proposed tie-up with Kroger , they said.
Cerberus is offering to pay around $40 a share for Safeway , slightly above its current price, some of the people said. Other financial details of the transaction couldn't be learned.
At $40 , Safeway's equity would be valued at more than $9 billion , and a deal would represent one of the largest supermarket mergers in recent years