Indiana Grocery Group bid for Central Grocers exceeded initial Jewel-Osco offer by at least $20M
New court filings show that Indiana Grocery Group's bid won out in an auction because it was worth at least $21.3 million more than Jewel-Osco's initial offer, though the exact sale price has yet to be settled.
Jewel had offered a starting bid of $100 million to buy 19 Strack & Van Til supermarkets out of bankruptcy: $70 million for the stores and up to $30 million for the remaining inventory, though the exact amount would have been assessed near the time of the sale based on what was left on the supermarket shelves.
Instead, Jewel is slated to get a break-up fee of up to $500,000, a common practice in bankruptcy court-supervised auctions because it incentivizes an initial bid that would set a floor on the price and help creditors recoup more of their money. After the auction stretched on for two days, Jewel declined to submit a higher offer than the final one from Indiana Grocery Group that Central Grocers' advisers deemed to be the best and highest bid, according to a court filing.
A Jeff Strack-led group that includes the Strack family, the Van Til family, former Strack & Van Til CEO Dave Wilkinson and other investors offered a package valued at at least $91.3 million, not including inventory in the stores that could be worth up to $30 million, according to court documents. They are offering at least $83.3 million, and the bid additionally will save the estate of Central Grocers about $8 million in borrowing to cover operating costs because Indiana Grocery Group committed to close on the deal between Aug. 2 and Sept. 11.
Read more: http://www.nwitimes.com/business/local/indiana-grocery-group-bid-exceeded-initial-jewel-osco-offer-by/article_36b9d142-8a47-53c4-a3f3-86e3817919eb.html