Albertsons looking at acquiring Whole Foods

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cathandler
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Re: Albertsons looking at acquiring Whole Foods

Post by cathandler » April 24th, 2017, 2:23 pm

As the SN story points out (FT has a hard paywall) this could be Albertsons way of finally going public.

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Re: Albertsons looking at acquiring Whole Foods

Post by jamcool » April 24th, 2017, 4:03 pm

Could Kroger buy Sprouts if ABS goes after Whole Paycheck?

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Re: Albertsons looking at acquiring Whole Foods

Post by Alpha8472 » April 24th, 2017, 5:42 pm

Albertsons wanted to buy Sprouts, but talks stalled. If Kroger offers more money, Kroger could be a winner of both.

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Re: Albertsons looking at acquiring Whole Foods

Post by klkla » April 24th, 2017, 6:34 pm

In the supermarketnews.com link from the OP I found this quote interesting:

"Albertsons, controlled by Cerberus Capital Management, has aggressively grown by acquisition in recent years but has unsuccessfully sought for a public offering on the New York Stock Exchange where it could raise money to pay down debts. Some analysts have raised the possibility that acquiring a public company could help Albertsons get onto the markets."

I guess that would be one way of finally getting their IPO but if their fundamentals were there they wouldn't have any problem doing the IPO in the first place.

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Re: Albertsons looking at acquiring Whole Foods

Post by storewanderer » April 24th, 2017, 9:00 pm

This would require some divests in NorCal...

I think Albertsons needs to continue to get its own operation in order, not buy far flung concepts.

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Re: Albertsons looking at acquiring Whole Foods

Post by pseudo3d » April 24th, 2017, 10:21 pm

Whole Foods is really too big for one company to acquire it (over 400 locations), especially a company like Albertsons (which needs to fix its own problems rather than trying to conquer a failing one). WFM should do what Albertsons did over a decade ago, go private, close and sell down locations (pull out of Britain, for instance...and Detroit), and fix internals. I can certainly see some locations ABS would happily take over. :roll:

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Re: Albertsons looking at acquiring Whole Foods

Post by wnetmacman » April 25th, 2017, 6:44 am

I can't imagine, with all the problems with Haggen, that the FTC will even begin to entertain this. Yes, they operate two different types of stores. Yes, they attract a different crowd. But I can see so many issues and overlaps that it would never, ever work.

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Re: Albertsons looking at acquiring Whole Foods

Post by pseudo3d » April 25th, 2017, 7:20 am

wnetmacman wrote:I can't imagine, with all the problems with Haggen, that the FTC will even begin to entertain this. Yes, they operate two different types of stores. Yes, they attract a different crowd. But I can see so many issues and overlaps that it would never, ever work.

Most of the stores where Whole Foods operates (in the big cities) are where either Albertsons operates stores or are in far-flung locations, making distribution difficult. The only way that it would work is if Albertsons Cos. teamed up with activist investors to buy Whole Foods Market Inc., taking its place in the stock market. Albertsons would then spin off the majority of the company to said activist investors as Whole Foods Market LLC, containing the majority of the company (including all trademarks and most stores). Albertsons then takes control of the "loser stores" as well as a few choice operations that would benefit them without causing FTC strife, licensing the Whole Foods format back from WFM LLC as it fully divests its operations in WFM. That way, Albertsons can get a number of good locations (especially ones that used to be theirs), helps Whole Foods stay alive without some sort of major catastrophe, and they get their IPO.

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Re: Albertsons looking at acquiring Whole Foods

Post by wnetmacman » April 25th, 2017, 12:41 pm

pseudo3d wrote:
wnetmacman wrote:I can't imagine, with all the problems with Haggen, that the FTC will even begin to entertain this. Yes, they operate two different types of stores. Yes, they attract a different crowd. But I can see so many issues and overlaps that it would never, ever work.

Most of the stores where Whole Foods operates (in the big cities) are where either Albertsons operates stores or are in far-flung locations, making distribution difficult. The only way that it would work is if Albertsons Cos. teamed up with activist investors to buy Whole Foods Market Inc., taking its place in the stock market. Albertsons would then spin off the majority of the company to said activist investors as Whole Foods Market LLC, containing the majority of the company (including all trademarks and most stores). Albertsons then takes control of the "loser stores" as well as a few choice operations that would benefit them without causing FTC strife, licensing the Whole Foods format back from WFM LLC as it fully divests its operations in WFM. That way, Albertsons can get a number of good locations (especially ones that used to be theirs), helps Whole Foods stay alive without some sort of major catastrophe, and they get their IPO.


If Albertsons were to purchase Whole Foods, it would have to be to keep the chain intact, but separate from their current operations. Purchasing to sell off wouldn't be allowed, because it would be pointless. Albertsons is building bigger stores than WFM. Most of their store stable is 30k or less; Albertsons starts at 50k. Also, there are a good number of WFM and Albertsons stores close enough to each other to create antitrust issues.

I simply don't see it happening; it is probably as much as rumor for Albersons as it is for Kroger to take them over. My bet is on someone like Cerberus to buy them outright. Cerberus has their hands full, so it would probably be a KKR-type company (come in, kill off the poor stores and dead weight, then take public).

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