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TORONTO -- The Great Atlantic and Pacific Tea Co. has hired JPMorgan Chase & Co. to sell off its more than 240 Dominion and Food Basics grocery stores in the Canadian province of Ontario, according to Bloomberg News, which cited anonymous sources. A&P will reportedly look at offers for the stores this week.
Montvale, N.J.-based A&P is said to be selling its Canadian business to raise cash to pay off debt. The sale of the stores could yield at least $1 billion, about a third of A&P's Canada's revenue last year.
Analysts have named Stellarton, N.S.-based Sobeys, Inc. and Montreal-based Metro, Inc. as A&P's main suitors for the stores. Purchasing the locations would double Sobey's market share to about 30 percent, and Metro's share would increase nearly threefold to 24 percent. No. 1 Canadian grocer Loblaws, which currently has about 34 percent of that country's market, and cash-rich private equity funds could also be interested in the acquisition, according to CBC Business News.
Officials at A&P headquarters were unavailable for comment.
After news of the incipient sale broke, shares of Great Atlantic & Pacific Tea Co. surged 11.05 percent yesterday to $18.90.