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Report: Safeway to Offer IPO Later This Year


AB Acquisition LLC, parent company of Safeway, plans to take the Pleasanton, Calif.-based retailer public later this year, according to published reports.

AB Acquisition has reportedly enlisted investment bankers to prep Safeway for an IPO that could raise as much as $500 million, but the "timing and size of the offering remains fluid," CNBC reported. This would be the chain's third public offering.

The news comes just months after the completion of Safeway's merger with Albertsons – also owned by AB Acquisition – on Jan. 30.

According to Planet Retail Director Kelly Tackett, however, this process will likely take longer than reported.

"I’d be surprised that AB Acquisition would take the company public so quickly, especially since the integration between Safeway and Albertsons isn’t likely complete," Tackett said, adding that the initial decision to take Safeway private was about "driving returns for its investors."

"In keeping with that theme, the proposed IPO could be more about the owners trying to take advantage of favorable market conditions and profit-taking than an indication of where the two supermarket operators are in the execution of their joint strategic plan," she added.

AB Acquisition is owned by an investor group led by Cerberus Capital Management, which also includes Kimco Realty, Klaff Realty, Lubert-Adler Partners and Schottenstein Stores.

When PG requested a statement on the matter, Safeway representative Teena Massingill noted that the retailer does not comment on rumors.

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