Cerberus Capital Management LP has made a bid for Harris Teeter
Supermarkets Inc. (HTSI) and is considering a structure in which a
part of the East Coast grocery chain would remain publicly traded,
according to a person familiar with the matter.
Harris Teeter, a supermarket chain with around 200 stores, has
been exploring a potential sale for months. Cerberus earlier this
year acquired several grocery chains from Supervalu Inc. (SVU) and
is looking to further expand in the grocery business.
Cerberus has not decided if it would attempt to acquire the
entire company or whether it would buy a major piece and leave some
part in the hands of public shareholders, the person said. The
market capitalization is about $2.3 billion. Shares rose Wednesday
more than 2%, to $47.02, after The Wall Street Journal reported on
the Cerberus bid.
It is not clear whether others have bid for Harris Teeter. On
May 8, the company said in a securities filing that it is in
discussions with "certain parties" about strategic alternatives but
that it is unknown whether talks will result in a deal.
It is possible Cerberus and Harris Teeter will not reach an
agreement on a price for the company, or that other bidders will
emerge, the person said.
An acquisition of Harris Teeter would be somewhat of a departure
for Cerberus, which has typically sought far more distressed
companies. Harris Teeter produces higher margins and offers
higher-end goods compared with Cerberus's mostly down-market
chains.
But Cerberus sees savings in combining Harris Teeter with the
Supervalu business, the person familiar with the matter said.
Cerberus envisions keeping the Harris Teeter management team and
its North Carolina headquarters intact, unlike with Supervalu where
it brought in its own leadership team.
Write to Sharon Terlep at Sharon.Terlep@wsj.com
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