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 talk that a handful of buyout firms are exploring a deal for all or part of the supermarket chain.
Five-year credit default swaps widened by 50 basis points to 251 basis points.
Reuters reported late on Tuesday that buyout firms, including Cerberus Capital Management LP, are interested in the business, citing people familiar with the matter.
It could potentially shape up to be one of the largest leveraged buyouts since the financial crisis.
Safeway, the second-largest US mainstream grocery store operator with a market value of over US$8 billion, is not running an auction currently, but is aware of the buyout interest and reviewing options with advisor Goldman Sachs Group Inc, the people said.
