Albertsons Directors Say They Stand Behind CEO

The independent directors of No. 2 U.S. grocer Albertsons Inc. said Wednesday that they were backing Chief Executive Larry Johnston despite last week’s termination of a plan to sell the company.

Late on Dec. 22, Albertsons said it had terminated all discussions on the potential sale of the entire company, sending its shares down 12% the following day.

But Albertsons also said Dec. 22 that it was still in talks with several parties that might buy its underperforming assets.

In a statement Wednesday, Albertsons’ 11 independent directors said: “We want to stress that the board has never wavered in its confidence in Larry. We continue to have full confidence in Larry’s ability to lead this company forward.”

Albertsons put itself up for sale in September and hired investment bank Goldman, Sachs & Co. and Blackstone Group as advisors. Albertsons, which also owns drugstores, attracted four groups of private equity bidders.

In recent weeks, one group -- hedge fund Cerberus Capital Management, grocery chain Supervalu Inc. and real estate investment trust Kimco Realty Corp. -- took the lead.

The group was prepared to offer about $26 a share for Albertsons -- $20 in cash and $6 in Supervalu stock -- in a deal worth $9.6 billion.

Drugstore chain CVS Corp. joined the group in an effort to buy some of Albertsons’ drugstores.

CVS on Dec. 22 said it was in talks to buy the company’s stand-alone Sav-on and Osco drugstores, but later said those discussions were terminated.

Boise, Idaho-based Albertsons operates about 2,500 stores in 37 states. Its banners include Albertsons, Acme, Shaw’s, Jewel-Osco and Star Markets.

Albertsons shares rose 28 cents Wednesday to $21.10.