Safeway CDS widen on leveraged buyout talk


By Melissa Mott

NEW YORK, Oct 23 (IFR) - The cost of insuring Safeway Inc's debt against default rose sharply on Wednesday on talkthat a handful of buyout firms are exploring a deal for all orpart of the supermarket chain.

Five-year credit default swaps widened by 50 basis points to251 basis points.

Reuters reported late on Tuesday that buyout firms,including Cerberus Capital Management LP, are interested in thebusiness, citing people familiar with the matter.

It could potentially shape up to be one of the largestleveraged buyouts since the financial crisis.

Safeway, the second-largest US mainstream grocery storeoperator with a market value of over US$8 billion, is notrunning an auction currently, but is aware of the buyoutinterest and reviewing options with advisor Goldman Sachs GroupInc, the people said.

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