Rumor has it that the grocery retailer
Harris Teeter Supermarkets Inc.
) is currently being eyed by
Publix Super Markets Inc.
) for a possible acquisition.
Harris Teeter, a $2 billion company employing 25,000 people
confirmed on Feb 2013 that it was looking for a suitable bidder
for all its assets. It also declared that it had appointed
JP Morgan Chase Capital
) as its financial advisor in this matter.
After the intention to sellout was declared, two other retail
) and international supermarket operator Koninklijke Ahold N.V.
based in The Netherlands emerged as possible bidders.
Publix has long been the dominant supermarket in Florida, with
756 locations but is proceeding northward with 179 locations in
Georgia, 53 in Alabama, 47 in South Carolina and 34 in Tennessee.
Publix is opening its first North Carolina store next year and
plans to expand. The takeover of Harris Teeter will help increase
its presence further north into Virginia and North Carolina.
Currently, Harris Teeter operates a regional chain of
supermarkets in eight states mainly in southeastern and
mid-Atlantic U.S. and the District of Columbia.
In Jan 2013, Harris Teeter reported earnings per share of 46
cents per diluted share, for its first fiscal quarter of 2013,
down 13.2 % from 53 cents per share reported a year ago. The
grocery chain has been facing margin pressure for some time due
to increased competition.
Given the sluggish growth in the last few years, the company
had slowed down store openings and instead focused on renovating
its existing stores.
However, slow recovery of the U.S. economy and apprehension
about the fiscal cliff hasresulted in consistently weak
discretionary spending by consumers.
Harris Teeter is of course not alone. Most of the regional
groceries are seeing tough times in the U.S. and are either
trimming down, or selling their assets to equity firms. The
) has decided to sell five of its supermarkets, which in
combination amount to 877 individual stores. The sale of these
supermarkets to private equity firm Cerberus Capital Management
LP for $3.3 billion is expected to improve its margins.
Currently, Harris Teeter carries a Zacks Rank #5 (Strong
HARRIS TEETER (HTSI): Free Stock Analysis
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