Kroger Rejects Takeover Bids, to Restructure
The board of directors of Kroger Co. on Friday approved a restructuring plan for the grocery retailer and rejected the competing takeover bids of Kohlberg Kravis Roberts & Co. and Dart Group Corp.
The plan, announced late in the day at the company’s headquarters in Cincinnati, would pay $40 in cash plus securities valued at $8 for each of its 78.6 million shares outstanding. Shareholders would retain stock in the company, the value of which was not immediately determined.
The restructuring has a value of at least $3.77 billion.
Kroger emphasized in a prepared statement that the plan would allow the firm to “remain a public company with shareholders maintaining their equity interest in the company.”
Kroger called the Kohlberg Kravis and Dart bids inadequate and said, “the restructuring would provide greater value to Kroger shareholders.”
The board said it had found the competing unsolicited bids “would not be in the best interests of Kroger, its shareholders and other affected constituents.”
Kohlberg Kravis, a New York-based investment firm, has offered $58.50 a share in cash and securities for Kroger, with a total price tag of $4.6 billion.
Dart, whose bid on Monday preceded the Kohlberg Kravis offer by one day, said it would pay $55 a share in cash and securities, or a total of about $4.32 billion.
The Kroger announcement came after the close of trading on the New York Stock Exchange, where the company’s stock fell 37.5 cents to $55.75 a share.
Kohlberg Kravis has outbid Dart for three other corporations in recent years, most recently for Stop & Shop Cos. in February of this year.
Dart, the Landover, Md.-based retailing company headed by the Haft family, has bid unsuccessfully on a number of retail companies in recent years, but made hundreds of millions of dollars on stock in those firms in the process.