Report: Bi-Lo Planning An IPO This Year

Bi-Lo, the ninth-biggest U.S. supermarket chain, is planning to go public later this year, Reuters reported on Wednesday (Aug. 21).

Unnamed sources told Reuters that Bi-Lo hired Citigroup, Credit Suisse and Deutsche Bank to lead the deal. Neither Bi-Lo nor the banks confirmed that there is an IPO plan, and there's currently no speculation about how much an IPO would raise.

The chain, which operates Winn-Dixie's 480 stores and 165 stores in the Sweetbay, Harveys and Reid's chains along with its 206 namesake stores, is owned by private-equity firm Lone Star, which bought Bi-Lo in 2005 from Dutch supermarket group Ahold. Lone Star added Winn-Dixie in 2011 and the other chains in May.

The fact that Lone Star wants to sell the chain after eight years and two acquisitions is no surprise—it's arguably overdue, and Lone Star has tried to sell Bi-Lo in the past. This also appears to be a good time to go public for grocers. After Sprouts Farmers Market (NASDAQ:SFM) this month, shares more than doubled.

But Sprouts is a fast-growing organic grocer, while Bi-Lo runs traditional supermarkets in the highly competitive southeast U.S. Publix has effectively stopped the chain's efforts to gain ground in Florida, while the usual threat from Walmart (NYSE:WMT) is always hovering over any grocery chain. That could make a successful Bi-Lo IPO a lot more of a challenge.

For more:

- See this Reuters story

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Forbes: Publix Could Be A Walmart Slayer
Bi-Lo Buys Sweetbay And Harveys Chains From Delhaize