Albertsons Owner Cerberus Makes Bid For Grocer Harris Teeter

The owner of Albertsons and Jewel-Osco wants to add the Harris Teeter (NYSE:HTSI) chain to its collection of grocers. Cerberus Capital Management has made a bid to buy the 212-store chain, the Wall Street Journal reported on Wednesday (June 26).

According to a source that the newspaper did not name, Cerberus has not decided whether to try buying the company outright or just buying a major interest. (At the close of business on Wednesday, Harris Teeter's market cap was about $2.34 billion.) In either case, Cerberus would not merge the chain into its other grocery holdings but would leave the existing management team intact at its North Carolina headquarters, the source said.

FierceRetail reported in May that Cerberus was looking at Harris Teeter and a half-dozen other grocers as acquisition targets.

If Cerberus does swallow Harris Teeter in its entirety, that will mean one more U.S. grocery chain won't be publicly traded. The trend to go private in grocery seems to be accelerating: For example, last month publicly traded Delhaize (NYSE:DEG) sold three of its U.S. grocery chains to privately held Bi-Lo. As of 2012, two-thirds of the 20 largest U.S. grocery operators are privately held, according to data from the National Retail Federation's Stores magazine. The more grocery chains are taken private, the less public data is available for chains to compare their performance to.

On the plus side, going private reduces the need to make every quarterly earnings announcement look great on razor-thin grocery margins. That might not be such an issue with Harris Teeter, whose stores are mostly in Atlantic-coast states from the Washington, D.C., area down to Florida and offer higher-end, higher-margin merchandise.

For more:

- See this Wall Street Journal story (sub. required)

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