Target: Bi-Lo Holdings
Sponsor: Lone Star
Financial Advisers: Citigroup Inc, Credit Suisse AG, Deutsche Bank AG
The Jacksonville, Florida-based company has hired Citigroup Inc, Credit Suisse AG and Deutsche Bank AG, the sources said. Bi-Lo and Credit Suisse could not be reached immediately for comment. Citigroup and Deutsche Bank declined to comment. The size of the planned offering could not be determined.
Dallas-based Lone Star, a large private equity firm with $38 billion of capital, bought Bi-Lo in 2005 for $660 million from Dutch supermarket group Ahold. Lone Star declined to comment.
Founded in 1961, Bi-Lo operates 206 grocery stores throughout the southern United States under its own banner. The company has been aggressively expanding its footprint in the last several years. In late 2011, it bought supermarket chain Winn-Dixie Stores for $560 million. Winn-Dixie’s 480 stores in Florida, Alabama, Louisiana, Georgia and Mississippi continue to operate as a Bi-Lo subsidiary under the Winn-Dixie brand. In May, Bi-Lo bought 165 stores from Food Lion parent Delhaize Group for $265 million in cash.
Traditional grocery chains have been pressured recently by discounters like Costco Wholesale Corp and mass retailers like Wal-Mart Stores Inc. Meanwhile, shares of grocers that focus on the fast-growing organic sector like Sprouts Farmers Market Inc and Fairway Group Holdings Corp have risen after recent IPOs. Sprouts shares more than doubled in their market debut in August, while Fairway shares have risen 33 percent since their debut in April.
Olivia Oran is a correspondent for Reuters in New York.