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Safeway says it's exploring possible sale to undisclosed buyer

Feb. 19, 2014 at 9:41 PM   |   Comments

PLEASANTON, Calif., Feb. 19 (UPI) -- Safeway Inc., the second-largest grocery chain in the United States after Kroger, announced Wednesday it is in talks for a possible sale of the company.

"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," Safeway said in a release. "The company will not comment further on these discussions at this time."

Safeway, which has about 2,400 stores, also announced it has decided to distribute the remaining 37.8 million shares it owns of gift card distributor Blackhawk Network Holdings -- about 72.2 percent of the outstanding Blackhawk shares -- to Safeway stockholders. The distribution will be tax-free unless the company consummates a sale, at which point it could become a tax liability, Safeway said.

In another development, Safeway said it is exploring the possibility of "monetizing" its 49 percent ownership of Casa Ley S.A. de C.V., the fifth-largest food and general merchandise retailer in Mexico.

"We are pleased with the progress we made in 2013," said Robert Edwards, Safeway's president and chief executive officer. "Strategies to grow sales and improve operating profit dollars have begun to produce results. In 2013, we generated our best volume growth since 2006, and we had our best identical-store sales growth in the last five years. At the same time, we continue to pursue strategies to enhance momentum and increase shareholder value. We look forward to continuing progress in 2014."

Safeway reported net fourth-quarter earnings Wednesday of $100 million, or 35 cents per diluted share, down from $170.7 million, or 71 cents a share in the same period a year earlier.

Sales and other revenue was $11.3 billion in the fourth quarter of 2013 compared to $11.2 billion in the fourth quarter of 2012.

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