From Deseret News archives:
Albertsons' shares plunge after sale negotiations end
Negotiations with a group of investors including Supervalu Inc. and CVS Corp. concluded because "we did not get a bid we could accept," Albertsons spokeswoman Shannon Bennett said late Thursday. The company said it is in discussions about selling some assets.
Albertsons is losing market share to Wal-Mart Stores Inc. after the discounter expanded to more than 1,000 supercenters that offer low-priced groceries. Albertsons may sell underperforming stores to improve profit at the company's remaining operations.
"The shareholders are giving this a huge Bronx cheer," said David Dietze, president of Point View Financial Services, based in Summit, N.J., which manages about $100 million, including Albertsons shares. "Shareholders are voting today in the market."
Shares of Boise-based Albertsons dropped $2.74, or 11.8 percent, to close at $20.54 Friday on the New York Stock Exchange, falling below the price the stock was trading at before the company put itself up for sale on Sept. 2.
JPMorgan Chase & Co. analyst Stephen Chick Friday downgraded the stock to "underweight" from "neutral," and BB&T Capital analyst Andrew Wolf cut his rating to "hold" from "buy."
A group including Supervalu, the owner of Save-A-Lot and Shop 'n Save stores, agreed with Albertsons to end acquisition talks. CVS, the No. 2 U.S. drugstore chain, ended discussions to buy Albertsons' Sav-on and Osco drugstores, the companies said in statements Thursday.
Supervalu spokeswoman Haley Meyer declined to comment.
"I think they are just middling on price, and they will end up with a dollar more and it will get done in a week," said Gary Giblen, head of research at Brean Murray & Co. in New York. "I don't think they have any intention of doing anything, but trying to shake more money out of the consortium. This is just a colossal negotiating ploy."
The New York Times reported Thursday that Albertsons' board rejected a $9.6 billion takeover offer from investors including CVS, citing unidentified people close to the negotiations.
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