TORONTO -- Private-equity firm Onex Corp. has made the best acquisition offer in an auction for Save-A-Lot, the hard-discount, limited-assortment grocery chain that Supervalu Inc. has been considering divesting, people familiar with the matter told Reuters.
Supervalu is considering a sale of Save-A-Lot to Onex as an alternative to a spinoff and is expected to make a final decision on the future of that business in the next two weeks, the people said on Thursday.
Sources previously indicated that Save-A-Lot could be valued at as much as $1.8 billion. The sources requested anonymity because the deliberations are confidential.
Supervalu and Onex did not immediately respond to requests for comment.
Shares of Supervalu were up 8.7% at $4.95 in late morning trading in New York on Thursday, giving the company a market capitalization of $1.3 billion.
Supervalu announced its intention to spin off Save-A-Lot a year ago. Supervalu said it would consider an outright sale of Save-A-Lot after receiving interest from private-equity firms.
Toronto-based Onex has approximately $22.6 billion of assets under management, including $6 billion of Onex's capital.
Earth City, Mo.-based Save-A-Lot operates approximately 475 stores, with about 900 additional stores operated by its licensees, mostly in the southern and eastern United States, according to the latest regulatory filing on its planned spinoff.
Supervalu has undergone significant management changes since announcing its intent to spin off Save-A-Lot, with Eric Claus, formerly CEO of supermarket company Great Atlantic & Pacific Tea Co., joining as CEO of Save-A-Lot, and Mark Gross, previously a co-president of grocery distributor C&S Wholesale Grocery, joining as CEO of Supervalu.
Eden Prairie, Minn.-based Supervalu is one of the largest grocery wholesalers and retailers in the United States, with annual sales of approximately $18 billion. It serves customers across the United States through a network of 3,395 stores, including 1,854 independent stores serviced primarily by the company’s food distribution business.
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