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∑ Albertsons Proceeds With Pared-Down $800M IPO
∑ Albertsons prices IPO at $16 a share, below range
∑ Albertsons pulls off a downsized IPO after years of trying
Albertsons Proceeds With Pared-Down $800M IPO
June 25, 2020
Albertsonís, the second-largest grocery chain in the United States, has priced its initial public offering (IPO) at a downsized $800 million, after numerous attempts of owner Cerberus Capital Management to cash out, Reuters said.
Cerberus had discussions with numerous shareholders which led to the downsizing, and Cerberus reportedly threatened to walk out at the last minute as it did in 2015 during one of the previous times the company tried to go public.
The pandemic has been a boon for Albertsonís, though, particularly in its early stages in March as everyone engaged in a spate of panic-buying to stock up in preparation for the quarantine. The company saw a 34 percent spike in sales at that time.
The lower IPO price could mean that the demand for more listings is decreasing and investor skepticism is still at play, likely due to the rising number of coronavirus cases in the U.S. over the past week. Rival grocery chain Kroger recently said it had also been seeing a decline in the demand that had buoyed it early in the pandemic.
Cerberus, an investor in Albertsonís since 2006, began to try taking the company public in 2015. The idea faced hesitation from other shareholders due to the companyís meager growth, and shareholders of the pharmacy chain Rite Aid Group, which Albertsonís tried to acquire, didnít go for the idea either.
Albertsonís said it sold IPO shares at $16 a piece, down from the target range of $18 to $20 it had wanted. The number of shares sold was also dropped from 65.8 million to 50 million. The company is valued around $9.3 billion because of this, not counting the $8.5 billion debt from the end of February, Reuters reported...
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Albertsons prices IPO at $16 a share, below range
By Claudia Assis, MarketWatch
June 25, 2020
Albertsons Companies Inc. ACI, priced its initial public offering at $16 a share Thursday afternoon, lower than the price range it was seeking. The grocer will sell 50 million shares, also below expectations, as it was seeking to sell 65.8 million shares in a range between $18 and $20 a share, according to a filing. The Wall Street Journal reported earlier Thursday, citing people familiar with the issue, that the company would sell fewer shares at a lower price. The IPO values the company, which operates grocery stores under the Albertsons, Safeway, Vons, Jewel-Osco and other names as well as meal-kit company Plated, at less than $10 billion. In the filing last week Albertsons said...
Albertsons pulls off a downsized IPO after years of trying
∑ U.S. supermarket operator Albertsons decided to go ahead with a downsized $800 million initial public offering on Thursday.
∑ The IPO was the culmination of multiple attempts by its private equity owner Cerberus Capital Management to cash out.
via CNBC - Jun 25 2020
U.S. supermarket operator Albertsons decided to go ahead with a downsized $800 million initial public offering (IPO) on Thursday, the culmination of multiple attempts by its private equity owner Cerberus Capital Management LP to cash out.
Cerberus has been an investor in Albertsons since 2006 and has been trying to take the company public since 2015. The grocerís anemic growth had faced pushback from IPO investors, as well as shareholders of Rite Aid Corp, the pharmacy chain it tried to merge with two years ago.
The COVID-19 pandemic buoyed Albertsonsí fortunes, however, as consumers stocked up on food while staying at home. Albertsonsí sales in March and most of April were up 34% from last year. Yet the scaling back of the IPO on Thursday indicates that some investor skepticism lingers.
Below-target pricing may also signal recent robust investor demand for new listings is softening after U.S. stocks fell sharply on Wednesday amid a surge in coronavirus cases in the United States. Wall Streetís main indexes closed higher in choppy trading on Thursday.
Rival supermarket chain Kroger Co said last week that the surge in demand for essential goods it saw during the coronavirus outbreak was fading, as American households reconsider their needs.
Albertsons said it sold shares in its IPO at $16 a piece, below its $18-$20 target range. This values the company at around $9.3 billion, excluding its $8.5 billion debt pile as of the end of February. The Boise, Idaho-based company also cut the number of shares sold in the IPO to 50 million from 65.8 million.
The downsizing of the IPO came after heated discussions between the underwriters and Cerberus, which deliberated whether to walk away from the offering at the last minute, as it did in 2015, a source familiar with the deliberations said.
Following the IPO...