Printer Friendly

SUPERVALU ANNOUNCES LETTER OF INTENT

 SUPERVALU ANNOUNCES LETTER OF INTENT
 MINNEAPOLIS, June 9 /PRNewswire/ -- SUPERVALU INC. (NYSE: SVU) and


Wetterau Incorporated (NASDAQ: WETT) today jointly announced that they have entered into a letter of intent for a merger whereby Wetterau would be acquired by SUPERVALU and become a wholly owned subsidiary of SUPERVALU. The merger would be valued at approximately $1.1 billion, which includes $440 million of outstanding Wetterau debt. Under the merger terms, Wetterau's common shareholders would receive in a taxable transaction $30.20 per share in cash from SUPERVALU and a pro rata distribution of 70 percent of the shares of Wetterau's Shop 'n Save subsidiary, with the remaining 30 percent of Shop 'n Save shares retained by Wetterau. The Shop 'n Save shares would be distributed to Wetterau shareholders in a taxable spin off prior to the acquisition of Wetterau by SUPERVALU. Wetterau has approximately 21.3 million shares outstanding.
 Shop 'n Save operates a chain of 28 superwarehouse retail food stores located in eastern Missouri and southern Illinois. Following the spin off, Shop 'n Save is expected to have stockholders' equity of approximately $27 million and long term debt of approximately $27 million. A preliminary estimate by management indicates Shop 'n Save would have, on a pro forma, stand alone basis, reported sales for the year ended March 28, 1992 of approximately $500 million and operating earnings before interest and taxes of approximately $10 million.
 The transaction is subject to the negotiation and execution of definitive merger and related agreements, approval thereof by the boards of directors of Wetterau and SUPERVALU, and by shareholders of Wetterau, and regulatory approvals. It is also subject to the receipt of an opinion from Goldman, Sachs & Co., independent financial advisers to Wetterau, that the consideration to be received by the Wetterau shareholders is fair to such shareholders from a financial point of view. It is contemplated that a definitive merger agreement will be executed by June 30, 1992 and that the merger will be completed by September 30, 1992.
 In a joint statement, Michael W. Wright, chairman and CEO of SUPERVALU, and Ted C. Wetterau, chairman and CEO of Wetterau, said, "We are very enthusiastic about this combination because the efficiencies and geographic reach it makes possible will help ensure the continued competitive vitality of the independent retailers we serve."SUPERVALU said it intends to finance the cash portion of the merger with cash on hand and increased utilization of credit facilities and no significant asset sales are planned in connection with the transaction.
 Mr. Wright will continue to serve as chairman of the board and CEO of SUPERVALU following the merger, with Mr. Wetterau holding the position of vice chairman and director of SUPERVALU and chairman and CEO of its Wetterau Incorporated subsidiary.Last year SUPERVALU announced its intent to focus on its core strengths in distribution and retailing. Wright said this transaction is a "giant step forward" in the implementation of that strategy. "It's hard to imagine a better fit," he said. "We had hoped to find a partner whose experience and strengths would combine with ours to build value for our shareholders. Wetterau is just such a company."
 SUPERVALU supplies and supports 2,650 retail food stores in 31 states, over 96 percent of which are operated by independent retailers. The company also owns and operates 105 retail food stores, including Cub Foods, Twin Valu, Scott's and Hornbacher's. Sales for SUPERVALU in its most recent fiscal year (February 29, 1992) were 10.6 billion.
 Wetterau supplies more than 2,900 grocery retailers and over 1,200 institutional accounts in 29 states. Additional company operations include nearly 160 company)owned retail stores in 12 states, general merchandise distribution, bakery production, commercial construction, transportation services, financing and leasing, and insurance protection. Sales for Wetterau in its most recently concluded fiscal year (March 28, 1992) were $5.7 billion.
 -0- 6/9/92
 /CONTACT: Mike Mulligan, 612-828-4441, Jeff Girard, 612-828-4028, or Dick Dalton, 612-595-4100, all of SUPERVALU/
 (SVU WETT) CO: SUPERVALU INC.; Wetterau Incorporated ST: Minnesota IN: FOD SU: TNM


KH -- MN004 -- 8261 06/09/92 09:47 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 9, 1992
Words:685
Previous Article:SCIENCE ACCESSORIES REPORTS SECOND QUARTER/SIX MONTHS RESULTS
Next Article:MELLON AGREES TO PURCHASE $2.6 BILLION IN MORTGAGE SERVICING RIGHTS
Topics:


Related Articles
WETTERAU UNABLE TO REACH AGREEMENT WITH SUPERVALU INC.
WETTERAU UNABLE TO REACH AGREEMENT WITH SUPERVALU INC.
SUPERVALU AND WETTERAU ANNOUNCE REVISED LETTER OF INTENT
SUPERVALU AND WETTERAU MAKE JOINT ANNOUNCEMENT
SUPERVALU COMPLETES THE ACQUISITION OF WETTERAU
SUPERVALU COMPLETES THE ACQUISITION OF WETTERAU
SUPERVALU/BIGGS DEAL COMPLETE
SUPERVALU and Richfood Announce Closing Date Pending Approvals.
SUPERVALU INC. Announces the Completion of Richfood Acquisition.
SUPERVALU Signs Letter of Intent With C&S Wholesale Grocers for Select Assets Previously Owned by Fleming Companies.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters