Dart Group Bids $4.32 Billion to Acquire Kroger

Dart Group Corp., known for a series of unsuccessful takeover bids for retailers, offered Monday to buy Kroger Co., one of the nation’s largest supermarket companies, for $4.32 billion.

Kroger said it was reviewing the offer, which was made in a letter from Dart Chairman Herbert H. Haft.

The bid followed Kroger’s announcement last week that it was considering a $3.8-billion restructuring plan. The restructuring was being explored as a defensive move, in part because of the Haft family’s interest in the Cincinnati-based supermarket firm.

The company said Monday that it was still considering the restructuring despite the Dart offer.

In his letter, which was released by Kroger, Haft said Dart was offering shareholders $43 cash per share and securities with a trading value of about $12 per share, for a total of $55 a share. Kroger has 78.6 million shares outstanding, which puts a $4.32-billion price tag on the deal.

Special Dividend

“All terms, including price, are negotiable and we are confident that together we can determine an appropriate, proportionate ownership of the combined companies by Dart Group’s shareholders and Kroger’s shareholders,” Haft said.

Kroger said last week that its board of directors was considering a restructuring that would involve a special dividend of $40 a share in addition to a junior subordinated debenture with a trading value of about $8 a share.

Shareholders also would maintain their equity interest in the company.

Kroger operates more than 1,300 supermarkets, 935 convenience stores and 15 membership warehouses in 29 states. The company also processes a variety of food products for sale in its retail stores and to outside customers.

Dart owns Crown Books bookstore chain and auto parts retailer Trak Auto Stores.

The Kroger bid was the first takeover offer Dart has made since its failed bid for Stop & Shop Cos. earlier this year. The Haft family has expressed interest in F. W. Woolworth Co. and Zayre Corp. this year.

Haft and his son Robert have earned reputations as corporate raiders because they have bought up big stakes in retailers, made unsuccessful takeover bids and then profited from the sale of their stock when the companies bought back the shares or went private in buyouts by other firms.

Whether the Hafts have bought any Kroger stock was unknown.