Ahead of Bell: Cerberus explores Supervalu options

Supervalu shares jump premarket on report Cerberus is still mulling deal for grocery chain

Associated Press

NEW YORK (AP) -- Shares of Supervalu jumped more than 12 percent in premarket trading Monday, following a report that private equity firm Cerberus is still considering multiple options for the grocery store chain.

Supervalu said in July that it was looking at its strategic alternatives, including putting itself up for sale. The company has also suspended its dividend, closed stores, cut staff and replaced its CEO in the past year.

The Eden Prairie, Minn.-based grocer has struggled for a number of years to turn around its business. It was an industry laggard prior to the recession and was getting a revamp ready when the economy crumbled. It has been unable to keep up with the intense competition of other grocers, big box store and discount retailers.

Supervalu owns the Albertsons, Jewel-Osco, Save-A-Lot and other grocery chains.

The Wall Street Journal, citing unnamed sources, said Monday that Cerberus Capital Management LP is looking at various options for Supervalu. These include possibly buying the entire business or just purchasing the Albertsons stores, which Supervalu bought in 2006. The Journal report said that Cerberus has not presented Supervalu with a formal bid.

The latest story counters a report by Bloomberg Thursday that cited unnamed sources maintaining that Cerberus' talks with Supervalu had stalled, because the private equity firm was having trouble obtaining the funds for a leveraged buyout. That report sent the shares plunging nearly 19 percent.

The Journal report on Monday said that Cerberus is still negotiating for financing.

Representatives for Cerberus and Supervalu could not be immediately reached for comment.

Supervalu's stock rose 30 cents, or 12.6 percent, to $2.68 before the market open.

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