Published on: October 6, 2009Belgium-based Delhaize Group announced yesterday that it has signed a non-binding letter of intent to acquire “a substantial majority” of the assets owned by bankrupt Bi-Lo LLC, for $425 million.
However, Bi-Lo’s assets remain up for bid, and another company could move in and top Delhaize’s offer. Bi-Lo is currently owned by Lone Star Funds, a private equity group; it filed for bankruptcy last March.
If the deal closes, it will give Delhaize and its Food Lion division the 214 stores in North Carolina, South Carolina, Tennessee and Georgia and approximately $2 billion in annual sales that Bi-Lo represents. At present, Food Lion has more than 1,300 stores in 11 U.S. states and has more than 74,000 associates.
Rick Anicetti, executive vice president of Delhaize Group and president/CEO of Food Lion, said in a prepared statement: "We at Food Lion, LLC have great admiration for the associates and stores at BI-LO. We believe our markets and service philosophy are complementary and we look forward to continuing our discussions with BI-LO."
According to the announcement, “The non-binding offer is subject to the satisfactory completion of the customary steps for such an acquisition including certain Bankruptcy Court approvals. Delhaize Group and BI-LO intend to close the transaction shortly after obtaining the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of the U.S. Bankruptcy Code, authorizing the transfer of the purchased assets to Food Lion. It is the intent of Delhaize Group to integrate the included BI-LO assets in the network of its wholly owned subsidiary Food Lion.”
- KC's View:
- It’ll be interesting to see how this affects competition in the various markets where Bi-Lo operates, and how companies like Publix and Winn-Dixie try to capitalize on the change.
I’ve already gotten some email from Bi-Lo employees who are not thrilled with this deal, and who are hoping that somebody else will step in and top the bid.
I’m not sure I get this. I’ve spent some time with the folks at Food Lion, as well as visited a number of their stores. I have been consistently impressed with the various formats the company has created, and with what appears to me to be enlightened management and leadership from the likes of Rick Anicetti, Cathy Green and Mike Haaf.
If anyone can make Bi-Lo work, I have to believe that Food Lion can.