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The Kroger Co.'s continuing exceptional financial performance is reportedly fueling the decision of Albertsons Cos. to proceed with its initial public offering in the next month, according to a Reuters report.
The rock-solid performance of the nation's leading supermarket chain, capped by its 47th consecutive quarter of same-store sale gains in Q2, will be used as benchmark to package Albertsons' IPO, according to conventional methods companies often used when setting an initial stock price.
The news syndicate cited unnamed sources when reporting that Albertsons – which made its intentions known with the Securities and Exchange Commission in July – plans to complete its IPO in late September or early October. Reuters' source valued Albertsons at $24 billion, including debt, noting that the determination to commence with the IPO by the supermarket chain's majority owner, Cerberus Capital Management, depicts "its confidence that it can fetch a high valuation for Albertsons," despite volatility in the stock markets.
As PG previously reported, the offering is listed to raise approximately $100 million, though the specific timing, and number of shares set to hit the trading floor, had not been disclosed. Albertsons said it plans to use the IPO monies to pay down debt and fund other corporate initiatives. It also has plans to open new stores and upgrade others, including related recent news that it will open eight new and replacement stores in 2015 and remodel a total of 115 existing stores across most of its operating divisions.
Boise-based Albertsons operates more than 2,200 supermarkets, including 1,247 Safeway stores.