Cerberus changes Albertsons packaging, again

Customers leave an Albertsons grocery store with their purchases in Burbank
Customers leave an Albertsons grocery store with their purchases in Burbank, California, U.S., July 17, 2012. REUTERS/Fred Prouser/

NEW YORK, March 1 (Reuters Breakingviews) - Buyout firm Cerberus Capital Management has owned parts of Albertsons (ACI.N) since 2006. The $14 billion U.S. grocery store chain finally floated shares in June 2020 after halting a listing five years earlier and then failing to buy pharmacy Rite Aid , a deal that would have given Albertsons a public currency. Less than two years on, the company is looking at ways to revamp itself again.

From one vantage point, Albertsons has done well. Since its shares listed in less-than-ideal circumstances their price has roughly doubled versus a 50% return for competitor Kroger (KR.N). Shares of insurance start-up Lemonade (LMND.N), which went public the same week, have fallen some 63%.

Cerberus’s ownership hasn’t been a disaster, but Albertsons isn’t necessarily a long-term success story either. When it explored listing in October 2015, the company’s equity was worth about $12.4 billion, Breakingviews reckoned at the time. Its market capitalization was only about 15% higher than that at Monday’s close, while Kroger’s stock is up about a third. Cerberus, which owns more than 30% of Albertsons, may be keeping the pressure on in the hope of squeezing out more value. (By Lauren Silva Laughlin)

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Editing by Richard Beales and Pranav Kiran

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