Jewel-Osco Bids $100M for Central Grocers
Chicago-area grocery chain Jewel-Osco has entered into an agreement to purchase and serve as a “stalking horse bidder” in a court-supervised sale process for 19 Strack & Van Til stores and certain other assets.
The agreement follows Central Grocers' filing for Chapter 11 bankruptcy protection on May 4. According to The Times of Northwest Indiana, Jewel has offered about $100 million for the deal: $70 million for the supermarkets and an estimated $30 million in leftover store inventory after the sales go through.
Central Grocers is continuing to evaluate proposals to acquire its state-of-the-art, 1,000,000-square-foot distribution center in Joliet, and its six additional Raceway real estate assets as it winds down its wholesale distribution operations. The three Ultra stores not included in the transaction are currently open and operating. The company is continuing to pursue a sale of those assets.
All Strack & Van Til, Town & Country Market, and Ultra Foods stores in Indiana and Illinois are open and serving customers. The company continues to cooperate with its leaders and expects to have access to sufficient liquidity to continue operating its stores and winding down the distribution center in an orderly fashion.
The proposed Strack & Van Til store transaction is being undertaken pursuant to Section 363 of the U.S. Bankruptcy Code and is subject to higher or better offers. If other qualified bids are submitted, the company will conduct an auction with the agreement of Jewel-Osco, setting the floor for the auction process. The transaction is also subject to, among other things, bankruptcy court approval and certain other customary conditions.
A hearing in bankruptcy court to approve proposed bidding procedures and the auction process is scheduled for June 2. Assuming court approval of the bidding procedures, the deadline for submitting qualified bids would be June 21. If any additional qualified bids are submitted, an auction would be held on June 26. A hearing to approve a sale will take place June 23 if no other qualified bids are received, and on July 10 if other qualified bids are received.
Based in Joliet, Illinois, Central Grocers Inc. is a grocery cooperative that serves independent supermarket retailers in the Chicagoland area.
Jewel-Osco is a banner of Boise, Idaho-based Albertsons Cos., which operates stores under 19 banners, including Albertsons, Safeway, Vons, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.