Because Blackhawk Marketing was severed from Safeway's balance sheet when Blackhawk shares were distributed to shareholders. The sale of Safeway is for $32 per share and I would expect it to trade at that price after Safeway's 49% share of the Mexico supermarket is eventually liquidated.
What I wonder is, how many vice-presidents will be jettisoned after the 4th quarte,r when the sale is done!
It's great to be on the top!
From SEC filing
.........On March 6, 2014, Safeway’s board of directors, adopted and approved the Safeway Inc. Retention Bonus Plan (the “ Retention Plan ”), effective March 6, 2014, for certain of Safeway’s key employees, including each of the named executive officers that are Executive Vice Presidents.
The Retention Plan provides for the payment of a cash retention bonus on each of March 6, 2015 and March 6, 2016, subject to remaining employed through each such date, in an amount equal to a percentage of the participant’s annual base salary as in effect on March 6, 2014, in an amount ranging from 25% to 37.5%. For Executive Vice Presidents participating in the Retention Plan, each bonus payment shall be equal to 37.5% of their annual base salary. Notwithstanding the foregoing, in the event a participant’s employment with Safeway is terminated without cause or for good reason, each as defined in the Retention Plan, the participant shall be entitled to receive any unpaid cash retention bonus amounts in a lump sum as soon as practicable following termination.........
It would have been better if Kroger could picked up Nor Cal, The crown jewel of all the Safeway divisions, but if Albertsons management gets ahold of this division , I'm afraid we will have a repeat of the Albertson buyout of Luckys and the Safeway brand will be ruined forever!
Define lose money! At the moment the Dow is down 187 points and Safeway is up 98 cents at $38.43. At what point do you think the shareholders would not be losing money? Still holding from the all time high in 1999 ? I would bet there is very few people that are still holding the stock at that price, but it's possible!
Stock is purchased through the NYSE, shareholders will receive the purchase price. You should be asking , what is the company going to look like when the company that purchased the shares eventually takes Safeway public. My guess, many stores will be sold or closed, real estate assets redeployed and anything that is of value , turned into cash.
Liabilities for pensions will be annuitized through some insurance vehicle. There will not be a need for store support or administration of the size that Safeway now has. The Safeway name will remain intact, especially in Nor Cal.
Albertsons destroyed the Lucky brand, that only took a few years! The Lucky brand has been resurrected but never returned to its former glory.
The last LBO in the 90's made the Hedge Fund 7 billion. I don't think that this will be the case this time.
Too bad they didn't go for a buyout when the stock was $15! I agree with the buy out, $42-$45. Safeway NorCal will survive, it's the big money maker. Corporate help will be hosed! Most of the 2,000 workers will be eliminated, interesting to be a fly on the wall in the coming weeks!
Now that Canada is sold and Chicago finalized, will Safeway be able to make their full year, bottom line numbers? The stores can't take much more staffing cuts without closing the stores. Is it time to cut backstage?
I can tell you where some of the shrinkage is coming from... major theft when the stores are busy. With so little staffing at peak times, baskets of groceries leave the store,
Canada was a profitable division and the earnings will be sadly missed! Perhaps Safeway could off the Vons division to increase the bottom line. The added benefit would be that backstage could eliminate many positions which would be a positive to net earnings.
Guess those were the shoppers that visited the stores the last few weeks and wondered why they have to waste 15 minutes of their life in a checkout line. With 3 check stands opened at mid day, one self check, one express and one full serve (but no bagger)!
I guess you don't get to shop in the stores much, as a consumer. Rather, you are in the stores after a major 'fire drill' when everything looks great and you have doubled the staff for the day!
If Safeway goes private, the company will be a much smaller, leaner and profitable company than it is today. Safeway will most likely shed Vons in SoCal and let go some other divisions, ultimately ending with about 900 stores.
Much dead weight will be shed from Pleasanton as nothing helpful for the stores has come from there in many years!
I'm wondering how much the Canadian divisions profit added to Safeway's bottom line. The way Nor Cal is being run today, it would appear that the bottom line profit for the company may come up short. Staffing in the stores is horrible, long lines, out of stocks (sale Turkeys), no service at the service counters, poor displays in the outer departments,( looking more like 'dump and run' ) . The message being, "don't shop here, even thou we spend millions on advertising and have lots of collage graduates backstage , we really don't want your business because we make all our profit when we buy the merchandise"!
I'm afraid those that will be cut are the bloated staff that occupy cubes backstage and maybe 75 to 100 vice-presidents!
It's hard to say, at this point it could be just a change in how earnings will be reported in the future. Distance the new CEO as far from Steve Burd operating style as possible, I'm not sure what Edwards experience in the food industry is, bit it can't be any less than Burd!
This company needs to be downsized to increase shareholder value, jettisoning all underperforming companies and cleaning up the bloated backstage help. Then, change the business model in the stores because cutting staffing levels every year isn't working. Remember, Steve Burd wanted to own the middle when he spent billions upgrading the stores and at the time, probably had 40% more labor than the stores have today!
Safeway is trimming help in the stores again, most likely to put a good spin on earnings going forward, A better solution, now that Canada will have earnings separated from continuing operations, start cutting the bloated backstage help. The stores are dealing with more paperwork from backstage......... than product that is sold!