BOISE, ID - It looks like legal woes won’t be getting in the way of Albertsons' planned $24 billion IPO, sources are reporting.
According to Reuters, sources have confirmed that Albertsons' majority owner, Cerberus Capital Management, will continue its plans to carry out the IPO despite the recent $1 billion lawsuit from Haggen and increasing volatility in the stock markets. Confidence remains high that the firm will be able to retain Albertsons’ high valuation.
As we’ve previously reported, Haggen accused Albertsons of misrepresenting the financial health of stores that Albertsons sold to the retailer. Albertsons sold the stores as part of an effort to win approval for a $9.2 billion merger with Safeway. As part of the merger, Albertsons divested 168 stores, 146 of which were to Haggen.
Despite these allegations, which Albertsons vehemently denies, Cerberus sees an IPO as a way to capitalize on the strong performance of rivals like Kroger, the sources told Reuters. Kroger's most recent financial report, announced last week, beat analysts' expectations in both profit and same-store sales and has been trading at approximately 8.23 times its projected 12-month EBITA, according to Thomson Reuters data.
Albertsons will use its “still unrealized synergies” from the Safeway merger and potential acquisition opportunities to gain investors attention, the sources said, while also confirming that the listing date could change based on market conditions.
