Supervalu Inc., the third-largest U.S. grocery store chain, said Thursday it has received a "number of indications of interest" as it conducts a review of strategic options.
The company is in "active dialogue" with several parties, Eden Prairie, Minn.-based Supervalu said in a statement. There cant be any assurance the review will result in a transaction, the company said.
Supervalu has been weighing a new direction after losing more than $2.5 billion in its previous two fiscal years, hurt by competition from discounters and costs to run stores. The company Thursday posted sales in its fiscal second quarter that dropped 4.6 percent, the 14th straight quarterly decline.
The company owns all of the Albertsons supermarkets in Idaho. Supervalu bought most of the Boise-based Albertsons chain in 2006.
"Theres a lot of work in front of them, and theyve made some progress," Joe Feldman, a New York-based analyst at Telsey Advisory Group, said in an interview. "Theres the hope that some sort of strategic action will be taken that might include some type of M&A that will help to monetize or create greater value from the business."
A number of grocers, including Kroger and Wal-Mart Stores, are looking to expand, and non-food retailers also may be interested in Supervalus stores, he said.
The company has attracted interest from billionaire Ronald Burkle and buyout firms KKR & Co. and TPG Capital, people with knowledge of the matter said earlier this month.
Burkle and the private-equity firms are looking at parts of Supervalu rather than the whole, said the people, who asked not to be named as the process is private. Supervalu would prefer a deal for the entire company and has extended its offer deadline past Oct. 15, the people said.
Cerberus Capital Management also has looked at some of Supervalus assets, said one person. Cerberus led an investment group in 2006 that acquired the Albertsons supermarkets Supervalu didn't want, mostly in southern and southwestern states. Two-thirds of those stores have since closed. Cerberus still controls Albertsons LLC, the Boise company that operates them.
Spartan Stores, a grocery retailer based in Grand Rapids, Mich., has also shown interest in some of Supervalus stores in the Midwest, two of the people said.
The company also Thursday posted a net loss of $111 million, or 52 cents a share, in the fiscal second-quarter ended Sept. 8, compared with net income of $60 million, or 28 cents, a year earlier. Sales fell to $8.04 billion.
Supervalu said it named Janel Haugarth, who is heading its company optimization efforts, to also lead its independent business organization.
Supervalu disclosed in July that it was working with Goldman Sachs and Greenhill & Co. to review options.
The company has 1,099 traditional retail stores such as Jewel-Osco and Albertsons and has 1,341 Save-A-Lot discount locations.
The Idaho Statesman contributed.