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PLEASANTON, Calif. -- Safeway, Inc. is in final buyout negotiations with Supervalu, Inc. for its Dominick's Finer Foods banner, according to unconfirmed published reports.
Rumors that Safeway, Inc. is selling Oak Brook, Ill.-based Dominick's to Supervalu sparked speculation on Wall Street on Monday, pushing down Minnesota-based Supervalu's stock by more than 10 percent, or $2.42 a share, ending at $21.28.
Supervalu was also hurt by news that Fleming said Friday it would sell its primary grocery-distribution business to C&S Wholesale Grocers, Inc. for an undisclosed price.
Spokespeople for Supervalu and Safeway declined to comment on the buyout rumors.
Last year, Safeway reached an agreement with the United Food and Commercial Workers Union to sell Dominick's after it failed to get more favorable labor terms. That agreement gave Safeway until July 26 to finalize a sale. Jill Cashen, a spokeswoman for that union, said she couldn't confirm that the companies are in talks.
A sale would end Safeway's five-year foray into the Chicago grocery market. Safeway officials said they couldn't make money at the Chicago-area institution unless workers made deep concessions.
Dominick's has been losing sales since Safeway bought it for $1.8 billion in 1998.