Exclusive: Lone Star's BI-LO up for sale: source
NEW YORK (Reuters) - BI-LO LLC, a U.S. supermarket chain owned by Lone Star Funds LONESB.UL, is up for sale and has drawn interest from strategic and private equity buyers, a source familiar with the matter said on Monday.
U.S. supermarket chains Kroger Co (KR.N) and Publix Super Markets are among potential bidders and are considering buying at least a significant number of BI-LO stores, the source said.
Kroger and Publix were not immediately available for comment. Lone Star declined to comment. The source is anonymous because the talks are not public.
The news of BI-LO's auction adds to a flood of private equity portfolio companies going on the block in recent months, as firms have incentives both to buy and to sell right now.
Pressure is on to invest billions of dollars raised in 2006-2008 as the end of those funds' investment periods approach, while funds are also keen to sell or take public existing investments to reward under-pressure investors.
Greenville, S.C.-based BI-LO emerged from bankruptcy protection in May after spending a little over a year there.
It had filed for bankruptcy in March 2009, as a weak economy and intense competition weighed on the supermarket industry, joining other grocers such as Bashas' Inc, Arizona's largest family-owned grocery chain and regional supermarket chain Penn Traffic Co.
BI-LO operates 207 supermarkets in South Carolina, North Carolina, Georgia and Tennessee. About 75 percent of the company's stores are in markets where it ranks as the number one or two conventional grocer, Reuters reported in April, citing company data.
Dallas-based Lone Star, a large private equity firm with $24 billion of capital, bought BI-LO in 2005 for $660 million from Dutch supermarket group Royal Ahold. Ahold had owned the chain, which was founded in 1964, since 1977.
In April, BI-LO said the reorganization plan approved by the court included a $150 million equity investment by Lone Star and $200 million in committed term loan financing from Credit Suisse. In addition, GE Capital provided a $150 million revolving credit facility.
(Reporting by Paritosh Bansal and Megan Davies; Editing by Phil Berlowitz, Bernard Orr)
WASHINGTON - A bipartisan budget deal announced in the U.S. Congress on Tuesday, though modest in its spending cuts, would end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown.
WASHINGTON - U.S. small business sentiment bounced back from a seven-month low in November, with owners setting their sights on creating more jobs and expanding operations.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.