CARTERET, N.J. -- Pathmark last week was a company enraged.
Ahold's decision to pull out of its Pathmark acquisition agreement left the New Jersey retailer without the deep pockets it was counting on to grow its business and handle its expenses.
Pathmark accused Ahold of failing to meet its agreement and promised the Dutch company would be held accountable.
"It is clear that Ahold has not used its best efforts to get this deal closed, as they are contractually obligated to do," said Jim Donald, chairman, president and chief executive officer of Pathmark. Donald also holds those titles with Supermarkets General Holdings Corp. (SGHC), Pathmark's parent, and SMG-II Holdings Corp. (SMG-II), the holding company controlling Pathmark through SGHC.
"In addition, they [Ahold]... have terminated our merger pact and their tender offer for the outstanding preferred shares of SGHC, which they are not permitted to do under the terms of our deal. We are very disappointed that Royal Ahold has chosen to take this abrupt action,"he said.
Pathmark said it intends to "hold Ahold responsible for the consequences of its actions."
Hans Gobes, a spokesman for Ahold, responding to Pathmark's accusations, told SN, "We feel we've made every effort to get the transaction approved."
Pathmark also said last week it plans to continue to pursue "all of our alternatives to enhance the value of Pathmark to its shareholders, customers and other constituencies."
Pathmark declined to provide additional comment about its plans.
Analysts had said that the Ahold transaction would have given Pathmark a stronger financial base. Pathmark has been constrained by high debt levels rooted in a leveraged buyout in 1987.
Ahold had earlier praised Pathmark's reputation with customers, in areas including urban merchandising, general merchandise and pharmacy.