Albertsons kicks off IPO
Supermarket giant moves forward with offering after two prior attempts failed
Just over three months after making its filing, Albertsons Cos. has launched an initial public offering of 65.8 million shares of common stock.
Boise, Idaho-based Albertsons said late Thursday that the IPO, sold by some of its stockholders, is expected to be priced at $18 to $20 per share. The company noted that it’s not selling any shares in connection with the common stock offering.
Certain of the selling stockholders are slated to grant the underwriters a 30-day option to buy a total of 9.87 million shares of common stock, Albertsons added.
The nation’s second-largest supermarket operator, Albertsons has been approved to list its common stock under the ticker symbol “ACI” on the New York Stock Exchange (NYSE).
On March 6, Albertsons filed a registration statement for an IPO with the Securities and Exchange Commission, a couple of months after news reports said the supermarket giant was looking to go public.
Two previous attempts by Albertsons to become public fell through. In 2018, the company attempted to go public via a $24 billion merger with Rite Aid Corp., but the deal collapsed after investor pushback. Investors also tried to take Albertsons public following its 2015 merger with Safeway but then ended up pulling the offering amid lackluster market conditions for retail stocks.
Albertsons is owned by an investment group led by private equity firm Cerberus Capital Management. Last month, the grocery retailer unveiled plans to sell a more than 17% stake in the company to private equity firm Apollo Global Management. Funds managed by Apollo affiliates agreed to buy $1.75 billion of Albertsons’ convertible preferred stock. With the repurchase of a portion of common stock owned by current shareholders, Apollo will hold about 17.5% of pro forma common shares outstanding in Albertsons on an as-converted basis.
And last week, Kimco Realty Corp. said it received $156.1 million as part of Apollo’s $1.75 billion purchase of Albertsons convertible preferred stock. With the move, Kimco’s ownership interest in Albertsons decreased to 7.5% from 9.29%. Before the transaction with Apollo, Kimco was the only other beneficial owner in Albertsons with at least a 5% stake. Albertsons Investor Holdings LLC, an investment group led by private equity firm Cerberus Capital Management (and also including Kimco), previously held more than 90% of the grocery retailer.
For the IPO, BofA Securities, Goldman Sachs, J.P. Morgan and Citigroup are acting as lead joint book-running managers for the common stock offering, Albertsons said. Credit Suisse, Morgan Stanley, Wells Fargo Securities, Barclays and Deutsche Bank Securities are serving as book-running managers for the common stock offering.
As of its 2019 fiscal year-end, Albertsons had 2,252 food and drug stores in 34 states and the District of Columbia under such banners as Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street and Haggen. The company also operates 1,726 pharmacies, 402 fuel centers, 23 distribution centers and 20 manufacturing plants.
