Published on: January 11, 2010Western New York-based Tops Friendly Markets announced on Friday that its bid to acquire a majority of Penn Traffic’s assets, including its 79 supermarket locations, has been accepted by Penn Traffic and recommended to the U.S. Bankruptcy Court for approval. Tops said that it “submitted a comprehensive bid including cash as well as additional value created by substantial reductions in unsecured claims made against Penn Traffic by UFCW Local One Pension Fund and C&S Wholesale Grocers.”
“From the very beginning of our transition to a locally operated company, we have pledged to invest in the markets we serve, and to grow and strengthen our position as the largest grocery chain in the region,” said Frank Curci, Tops’ president and CEO. “This new opportunity allows us to further fulfill that pledge as we look forward to meeting the needs of our new neighbors and customers, providing them with a positive shopping experience that focuses on great variety, value and service.”
Kevin Darrington, Tops’ CFO, said that the company plans “to invest in those stores that are in need of upgrades in an effort to best serve our customers and associates.”
The Buffalo News reports that this is by no means a done deal, and that competing bids - especially from Price Chopper - could derail the Tops efforts.
According to the News, “A U.S. Bankruptcy Court hearing ended Friday without coming to a decision on Tops' $85 million offer. Recommended by Penn Traffic and its creditors, Tops is considered the preferred bidder, subject to higher bids.
“Penn Traffic asked the court to require any competing bids to be submitted by Jan. 19, followed by a Jan. 21 auction and a hearing on Jan. 25 to approve a sale. The contract with Tops requires completion of the sale by Jan. 28.”
And, the News writes, “Operating stores within a 250-mile radius of its Williamsville headquarters would allow Tops to easily maintain its current hands-on management style, said Burt Flickinger III, managing partner of retail consulting firm Strategic Research Group. Out-of town management has plagued Penn Traffic for more than 15 years, and has been cited as a major obstacle to the company's success. Tops would do a better job of tailoring its ads to individual markets within the chain than Penn Traffic did, Flickinger said.”
- KC's View:
- It’s probably fair to say that almost anyone could do a better job than Penn Traffic did.
Still, this doesn’t feel over yet. Not quite.