Shares of Safeway climbed in after-market trading on Wednesday after the supermarket chain disclosed that it was “in discussions concerning a possible transaction involving the sale of the company.â€
Safeway, with a total enterprise value of $13.5 billion, has had on and off talks with private equity firms since last year. One of the private equity firms it had previously been in discussions with, Cerberus Capital Management, is said to be the lead suitor this time around, according to Reuters. A deal would be one of the largest buyouts in years.
Cerberus last year acquired some brands of Supervalu, another supermarket chain, for $3.3 billion
The Pleasanton, Calif.,-based company said in a statement that “Although the discussions are ongoing, the company has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement or a completed transaction. The company will not comment further on these discussions at this time.â€
Last fall, Safeway installed a poison pill plan to prevent investors from acquiring more than 10 percent of the company after an activist hedge fund, Jana Partners, took a 6.2 percent stake. The hedge fund has since sold off some of its position and now own 4 percent.
Also on Wednesday, Safeway reported fourth-quarter earnings that were stronger than expected.
