KKR Increases Its Offer for Kroger to $5.03 Billion
The investment firm of Kohlberg Kravis Roberts & Co. raised its takeover offer for Kroger Co. to $5.03 billion Tuesday, surpassing a planned $4.6-billion defensive restructuring announced by the grocery giant last month.
Kohlberg Kravis said that based on its assessment of the restructuring proposal, it was willing to pay $64 in cash and securities for each of Kroger’s 78.6 million shares outstanding. It had offered $58.50 in cash and securities previously.
The announcement revived prospects for another round of bidding for Kroger, one of the nation’s largest supermarket chains that has long been identified as a takeover target.
“The Kroger Co.’s management, legal and financial advisers are reviewing the second unsolicited proposal from KKR,” said Paul Bernish, a spokesman for the Cincinnati-based Kroger.
He said the company had no further comment.
Resisting Suitors
Kroger stock was among the most actively traded issues Tuesday on the New York Stock Exchange, falling 87.5 cents a share to $55.375 as more than 1.2 million shares changed hands.
The chain has been resisting takeover maneuvers from Kohlberg Kravis and the Haft family of Maryland, two longtime adversaries who have battled for other supermarket businesses in the past.
Kohlberg Kravis’ enhanced offer was announced after business hours, and there was no answer at the offices of Dart Group Inc., the Haft-run retailing concern in Landover, Md.
As outlined in a brief press statement, the new offer is composed of $50 in cash, $11 in debt securities and $3 in stock of the new company that Kohlberg Kravis would create from Kroger. The investment firm’s earlier offer contained the same cash portion of $50 but only $8.50 in securities.
Kroger announced an extensive restructuring plan on Sept. 13 designed to foil bids from Kohlberg Kravis and the Hafts, who had offered $4.32 billion.
Layoffs Proposed
That restructuring plan, which Kroger valued at $4.6 billion, also would leave shareholders with a continuing interest in the company but would reshape it into a smaller, leaner and more heavily indebted business.
Part of the plan included layoffs and the sale of operations, including some food processing facilities as well as stores in Alabama, California, Florida, North Carolina, South Carolina, Texas and Virginia.
The takeover struggle for Kroger began earlier in the month when the Hafts received clearance from federal antitrust regulators to buy at least $15 million worth of Kroger stock.
