Federated May Pick Today Between Bidders for Ralphs

The fate of the Ralphs supermarket chain is expected to be decided today at a board meeting of the parent company, Federated Department Stores.

Speculation was rampant late Wednesday that Federated management had found a buyer for its 129-store food operation as part of a reorganization. The lead bidders reportedly are Lucky Stores and Ralphs management, which has been seeking financing of about $1 billion for a buyout.

Among some Ralphs employees, rumors spread Wednesday that Lucky had won the bidding. A Lucky spokeswoman, reached at the Dublin, Calif., headquarters, would not comment.

A principal of Riordan Freeman & Spogli, a Los Angeles merchant banking firm that owns Boys Markets and reportedly has been backing Ralphs management, also declined to comment.

However, employees said managers at Ralphs’ Compton headquarters were “dusting off resumes” because management had not secured funding for the deal. Lucky, which operates a Southern California division in Buena Park, presumably would fire most of Ralphs’ headquarters personnel if it succeeded in its bid for Ralphs, observers said.

For a time, speculation swirled that Lucky would buy the company and then sell some stores to Albertson’s, based in Boise, Ida. Albertson’s Vice Chairman Gary Michael, however, said the company is “definitely not in it at all. Lucky has not discussed it at all with us.”

Cincinnati-based Federated, which also owns Bullock’s, Bloomingdale’s and I. Magnin, continued to be the subject of rumors about its own future. It said Wednesday that the board would also consider today the offer by Campeau Corp., a Canadian real estate developer that threw Federated into turmoil by announcing its interest in buying the company on Jan. 25.

Federated previously has rejected two $66-a-share, or $5.8-billion, bids by Campeau because the Toronto developer had not provided firm financing commitments.

A Wall Street source said a showdown over the bid could come today if Campeau makes formal its $66-a-share bid--and provides evidence of financing--before the meeting.

Separately, Wall Street sources say other contenders are still in the bidding for Federated. They include Dillard Department Stores in partnership with two or three real estate developers.