Supervalu sale talks with Cerberus said to stall
Cerberus Capital Management LP’s pursuit of grocery chain Supervalu Inc. has stalled because the private-equity firm has had trouble obtaining the funds for a leveraged buyout, said people familiar with the matter.
Potential lenders are concerned over how the store chain will manage the increased debt as revenue shrinks, said the people. Lenders are also pressing Cerberus to put more money into the deal than the firm is willing to, they said. Without a sale to Cerberus, Supervalu risks having to restructure its grocery chains on its own or sell individual assets, the people said. That may pose a challenge because the struggling retailer would face big tax payments for selling the assets, the people said.
Supervalu “has received a number of indications of interest and is in active dialog with several parties,” company spokesman Mike Siemienas said. In July, Supervalu said it was working with Goldman Sachs Group Inc. and Greenhill & Co. to review options. The company attracted interest in parts of its business from private-equity firms KKR & Co. and TPG Capital, as well as from billionaire Ronald Burkle, people with knowledge of the matter have said.