Albertsons Prices IPO

Stock sale could generate $1.3B exit for Cerberus group
Photograph: Shutterstock

Albertsons Cos. late June 18 detailed plans to raise more than $1.3 billion in a public stock offering.

The Boise, Idaho-based retailer, in an updated federal filing, said it would look to sell 65.8 million shares of stock at an initial price of $18 to $20 per share on the New York Stock Exchange.

The company said it would not receive any proceeds from the stock sale or from options granted to underwriters to buy as much as 9.9 million additional shares. If successful, the sale would provide a long-awaited but spectacular exit for an ownership consortium led by Cerberus Capital Management, the private investor that launched the company 14 years ago from a collection of grocery stores deemed undesirable by Albertsons’ predecessor when that entity sold most of its assets to Supervalu.

Albertsons subsequently bought those units back in 2013 and acquired rival Safeway in 2015, growing into a $62 billion company. The group is currently riding strong momentum from improving operations, reduced debts and a big sales boost from the coronavirus crisis.

The company will trade under the symbol ACI.

As previously reported, Albertsons made at least two prior attempts to spin into public ownership in recent years only to encounter market resistance. A 2015 attempt, based on Albertsons’ success as a consolidator, never gained helium, particularly after the Whole Foods-Amazon deal of 2017 triggered a larger market reassessment of the supermarket space. More recently, Albertsons eyed going public through a reverse merger, but shareholders of drug chain Rite Aid voted an acquisition deal down in 2018.

Albertsons filed a stock registration privately late last year and publicly in March, only days before the declaration of national emergency on the coronavirus crisis. Though that looked to be another blow to Albertsons’ chances for a successful public launch, markets have largely endured COVID disruption and the subsequent sales growth prompted the company to update its case on its performance during the crisis, noting for example that identical-store sales in the first 12 weeks of the current quarter were running at 30%.


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