Two months ago, all bets were on Albertsons to acquire Golub Corp. (Price Chopper) the 84-year-old regional grocery chain based in Schenectady, NY. Now it appears that deal is off as several financial sources have told us that the Boise, ID-based chain has withdrawn its interest to buy Price Chopper, primarily because it wants to concentrate on launching its effort to go public, which was first announced in July 2015.
Price Chopper, which shook up its senior management team a year ago and has acknowledged that it would explore opportunities to enhance its capital position to improve its store operations and convert more units to its upscale Market 32 format, took an even more forward leap when it hired New York investment bank Sagent Advisors to issue a prospectus relating to those opportunities.
During the past six months, multiple financial sources told us that interest in the approximately 135-stores chain was far from robust with Albertsons emerging as perhaps the only bidder to acquire the whole company (reportedly minus real estate) for about $1 billion. Part of the challenge in acquiring the market leader in the Capital Region of New York (for any buyer) would reportedly be to absorb an approximate $300 million underfunding in its pension plan.
However, after speculation began to increase last fall that Albertsons was the leading contender to acquire Price Chopper, Reuters announced in late December that a deal was close between the two parties. Through our Wall Street sources, we also confirmed that a deal was close.
However, we were told that, just before 2016 ended, Albertsons elected not to pursue the Price Chopper purchase, opting instead to prioritize its effort to take the company public, something it first announced 18 months ago.