Supermarket chain Bi-Lo hires banks to lead IPO: sources

Tue Aug 20, 2013 3:26pm EDT

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(Reuters) - Bi-Lo Holdings, the ninth-largest traditional supermarket chain in the United States, is planning an initial public offering later this year and has tapped banks to lead the deal, according to two sources familiar with the matter.

The Jacksonville, Florida-based company has hired Citigroup Inc (C.N), Credit Suisse AG (CSGN.VX) and Deutsche Bank AG (DBKGn.DE), the sources said.

Bi-Lo and Credit Suisse could not be reached immediately for comment. Citigroup and Deutsche Bank declined to comment.

Founded in 1961, Bi-Lo operates 206 grocery stores throughout the southern United States under its own banner. The company has been aggressively expanding its footprint in the last several years.

In late 2011, it bought supermarket chain Winn-Dixie Stores for $560 million. Winn-Dixie's 480 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi continue to operate as a Bi-Lo subsidiary under the Winn-Dixie brand.

In May, Bi-Lo bought 165 stores from Food Lion parent Delhaize Group DELBA.UL for $265 million in cash.

Dallas-based Lone Star, a large private equity firm with $38 billion of capital, bought Bi-Lo in 2005 for $660 million from Dutch supermarket group Ahold (AHLN.AS).

Lone Star declined to comment.

Traditional grocery chains have been pressured recently by discounters like Costco Wholesale Corp (COST.O) and mass retailers like Wal-Mart Stores Inc (WMT.N).

Meanwhile, shares of grocers that focus on the fast-growing organic sector like Sprouts Farmers Market Inc (SFM.O) and Fairway Group Holdings Corp (FWM.O) have risen after recent IPOs.

Sprouts shares more than doubled in their market debut in August, while Fairway shares have risen 33 percent since their debut in April.

(Reporting by Olivia Oran in New York; Editing by Steve Orlofsky; Editing by Jeffrey Benkoe)

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