Private equity firm Onex Corp. has made the best acquisition offer in an auction for Earth City-based Save-A-Lot, the discount grocery retail chain that Supervalu Inc. has been considering divesting, according to people familiar with the matter.
An outright sale of Save-A-Lot would deprive Supervalu of one its fastest-growing businesses, but would allow it to focus on improving profit margins in its wholesale distribution food business, which has suffered from deflationary price pressures, lower traffic and customer attrition.
Supervalu is considering a sale of Save-A-Lot to Onex as an alternative to a spinoff and is expected to make a final decision on the future of that business in the next two weeks, the sources said on Thursday.
The price Onex is offering was unavailable, but sources have previously indicated that Save-A-Lot could be valued at as much as $1.8 billion. The sources requested anonymity because the deliberations are confidential.
Read more: St. Louis Post-Dispatch