US retail giant SuperValu is apparently on the verge of a leveraged buyout, causing shares in the company to rise by 6.6 per cent to US$17.13 on Friday 12 March, according to a report by Reuters.
Analysts suggest that the group could fetch up to US$22.5 per share, but remain sceptical since the rumour also boosted shares in various companies – including Radioshack and GameStop – while failing to materalise into anything concrete.
SuperValu is carrying long-term debt of nearly US$8bn, many of its stores require investment, and its prices are above those of rivals in many markets, according to analysts.
The company, which operates the SuperValu, Albertsonsand Jewel-Osco supermarket networks, declined to comment on “rumour and speculation”.
Despite moving away from promotions in favour of an everyday low prices strategy, SuperValu has struggled to maintain sales and profits during the economic downturn.
The group recently revealed plans to double the size of its Save-A-Lot discount format over the next five years in an effort to attract price-conscious consumers in the US.
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