You are here
Loblaw Cos., Ltd. said Friday that the shareholders of T&T Supermarket, Inc., Canada’s largest Asian food retailer, have entered into an agreement with Loblaws, Inc., a Loblaw subsidiary of Loblaw, for the purchase of all the common shares of T&T. The purchase price is set at $225 million, with certain adjustments to be made at closing, according to Brampton, Ontario-based Loblaw, adding that $191 million of the purchase price will be funded by cash and the rest through preferred shares issued by T&T, the value of which will be tied to the future performance of the business.
“T&T’s talented management team and colleagues have developed what we believe are the best Asian stores in Canada, which will be used to help Loblaw extend its ethnic offering to better serve Canada’s largest-growing customer segment,” noted Loblaw executive chairman Galen G. Weston.
Richmond, British Columbia-based T&T began operations in 1993 and now runs 17 stores in British Columbia, Alberta and Ontario, as well as four distribution centers, three in Vancouver and the other in Toronto.
“Some of our customers have a nickname for us -- The Asian Loblaw. Today we are proud it has become a reality,” said T&T CEO Cindy Lee. “This acquisition recognizes all of our employees’ hard work over the years and the great business we have built. Together with Loblaw, we will continue to celebrate our authenticity while maintaining and enhancing our customers’ shopping experience.”
Closing of the transaction is expected before the end of the year. TD Securities Inc. acted as T&T’s financial adviser on the transaction.
In other Loblaw news, the company reported that for the second quarter of 2009, its basic net earnings per common share were 70 cents, up 37.3 percent; its sales were $7,233 million, a 2.8 percent increase; and its same-store sales had grown 2.5 percent.
“This quarter’s improvement in earnings was largely cost and gross margin driven,” observed Weston. “This is a trend that we do not expect to continue. We have consistently said that the second half of this year would be by far the toughest, and with market volumes in decline, inflation dropping off, intensified competitive activity and a substantial ramp up in our infrastructure and renovation programs, we expect sales and margins to be significantly challenged.”
Loblaw is Canada’s largest food distributor and a provider of drugstore, general merchandise and financial products and services. With more than 1,000 corporate and franchised stores from coast to coast, Loblaw and its franchisees employ over 139,000 full-time and part-time employees. The company’s banners include Loblaws, Loblaw Great Food, Zehrs, Zehrs Great Food, Fortinos, Real Canadian Superstore, Loblaw Superstore, valu-mart, Your Independent Grocer, Atlantic Superstore, Maxi, Maxi & Cie, no frills, Provigo, and Extra Foods.