Kimco Realty Corp. in deal to buy Albertson's

Long Island Business News, Jan 23, 2006 by Dawn Wotapka Hardesty

In an announcement that ends months of speculation, Kimco Realty Corp. Monday said it is part of a team acquiring Albertson's grocery stores in locations stretching from Dallas to northern California.Kimco, based in New Hyde Park, joined forces with Cerberus Capital Management, L.P., Schottenstein Stores Corp., Lubert-Adler Partners and Klaff Realty, L.P. This transaction is part of a mammoth $9.7-billion acquisition - $17.4 billion including debt - by Supervalu Inc. and CVS Corp. to gobble Albertson's, the country's second biggest grocery chain.

Minneapolis-based Supervalu will pay about $6.3 billion in stock and cash and assume another $6 billion in debt for 1,124 Albertson's stores. Rhode Island-based CVS is buying 700 stand-alone drugstores and Albertson's ownership interests in the drugstore real estate for about $2.9 billion. The chain now operates more than 5,000 stores.The team that includes Kimco, the nation's largest operator of community shopping centers, will acquire shops in Dallas/Ft. Worth, Northern California, Florida, the Rocky Mountains and the Southwest. The group plans to keep the Albertson's name, according to The Associated Press.Since ailing Albertson's began exploring strategic alternatives in September, Kimco's name has constantly mentioned. The New York Times reported that a deal involving Kimco unraveled at the last minute late last year.Kimco did not return a call for comment.Shares of Kimco jumped 41 cents to trade at $34.41 per share on the New York Stock Exchange.The Associated Press contributed to this report.