Haggen has reached asset purchase agreements for 36 of the 127 stores it's surrendering as it retreats to its native Pacific Northwest turf in the wake of its Chapter 11 bankruptcy filing last month.
In newly-released bankruptcy court documents, Commerce, Calif.-based Smart & Final is the stalking horse bidder for 28 stores – 27 in central and southern California and one in Las Vegas – while Los Angeles-based Gelson's Markets has been named the stalking horse for eight closing Haggen stores.
Smart & Final's bid of $56 million for 28 stores, coupled with Gelson’s $36 million offer for eight soon-to-close Haggen locations, will serve as the baseline bids for the 36 stores leading into the auctions that are scheduled for Nov. 9. Both regional retailers' bids will be approved in the court-supervised sale if no other higher offers are made.
Smart & Final will be "entitled to certain break-up fees and expense reimbursement should an alternate higher bid ultimately be approved," the company noted. If approved, the transaction is expected to close in the fourth quarter of Smart & Final's fiscal year, and the company plans to convert the stores to its Smart & Final Extra! banner.
Meanwhile, if Gelson's stalking horse bids for the Los Angeles County stores prove successful, the move will represent a significant expansion for the 18-store chain, which would increase by nearly 50 percent.
"We are excited at the prospect of significantly expanding our brand offerings to new communities.” said Gelson's President and CEO Rob McDougall. “Should our bid prove successful, it will be a benefit for thousands of shoppers who value quality products and exceptional service."