Seeking Alpha

Safeway takeover buzz ramps up

  • A bid by Cerberus to buy Safeway (SWY +1.7%) has been complicated by the emergence of Kroger (KR +2.4%) as a potential bidder for part or all of the company, reports the WSJ.
  • Inside sources still give the nod to Cerberus as the favorite to win out due to the risk that a Kroger takeover won't sit well with regulators.
  • Shares of Safeway are up 30% over the last 30 days off the takeover buzz.
Comments (2)
  • Mark Krieger
    , contributor
    Comments (4117) | Send Message
     
    KR could still do the deal and divest the stores that would be subject to anti-trust concerns. Estimates are floating around that KR would need to rid themselves of about 160 newly acquired locations. KR could probably make a profit selling those stores by realizing the hidden value in their real estate value.

     

    I think a $42 offer by KR makes sense
    6 Mar, 11:38 AM Reply Like
  • Chris Sandys
    , contributor
    Comments (121) | Send Message
     
    Nice work, Mark Krieger. You were quite close in your estimate of a potential price.
    7 Mar, 07:28 AM Reply Like
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