American Stores Co. said it has withdrawn its Acme Markets Inc. subsidiary from sale because it couldn't get the price it wanted.
Salt Lake-based American Stores said last September, when it announced that Acme was for sale, that it would only sell the chain if it received an "attractive" price.Acme has 175 stores in eastern Pennsylvania and southern New Jersey. Another 100 stores are in Delaware, Maryland, New York and Virginia.
"While our sale process showed that Acme could currently be sold for a price approaching $1 billion, we do not believe that price level is satisfactory," said J.L. Scott, American Stores chief executive officer.
While Scott would not disclose who bid on Acme, Fleming Co., wire service reports said an Oklahoma-based wholesaler, along with Great Atlantic & Pacific Tea Co. and the grocery distributor Wetterau were rumored to have been interested. The reports said the company wanted at least $1.1 billion for the chain.
Scott said the company evaluated the benefits of the Acme sale on its balance sheet and future capital spending plans against the dilution it would have on earnings before deciding to take Acme off the market.
"Based on our recently announced asset sales and their anticipated beneficial impact on our financial position, coupled with a lower interest rate environment, we believe it is in our shareholders' interest to withdraw Acme from sale," said Scott, who expressed the company's appreciation to Acme's employees "for their patience and support in this process."
In Philadelphia, a union leader confirmed the bid, backed by Acme employees, had fallen short, but he did not rule out a deal at some point in the future.
"It was not within our means to do it. It's a shame. We're disappointed," said Wendell Young III, president of Local 1776 of the United Food and Commercial Workers.
Union members had voted last week to join Los Angeles investment bankers Freeman Spogli & Co. in bidding for Acme.
"It's not over," said Young, who said in the future American Stores may again decide to sell Acme. "It is still viable. We will be monitoring the situation."
The proposal called for employees to give up their raises for three years and to use the money to buy 40 percent of the new company's stock. Employees' union contracts would also be extended for five years from the date of the sale.
Last Friday, American Stores agreed to sell the stock of Alpha Beta Co. and 145 of its stores to Food 4 Less Supermarkets Inc., based in Pasadena, Calif., for $248 million, a move that ended its antitrust litigation battle with the California attorney general that began after it acquired Lucky Stores in 1988 for $2.5 billion.
Last month, the company also announced it would sell its 51 Osco drugstores in Utah, Colorado and Wyoming to Pay Less Drug Stores of Wilsonville, Ore., for $60 million, thus terminating all of its retail operations in Utah.
In August, the company closed its four Skaggs Home Improvement Centers in Utah; in February 1990, American closed its last eight Skaggs Alpha Beta grocery stores in Utah.