MEMPHIS, Tenn. -- Fleming Cos., Oklahoma City, and Bruno's, Birmingham, Ala., have dibs on Seessel Holdings Inc. here, but a federal judge here will decide who gets the prize.
If Fleming wins, it is likely that SHI, owner of the 10-store Seessel's Supermarkets chain, would be sold immediately to Schnuck Markets, St. Louis, executives from Fleming and Schnuck told SN. Seessel's 1995 sales were $165 million.
Last week, SHI filed a complaint in U.S. District Court here, requesting that the judge determine if Fleming or Bruno's is entitled to buy Seessel's because it is unsure who the legal suitor is. Fleming and Bruno's each claim to have struck agreements with SHI that grant exclusive takeover rights. Court documents name Fleming and Bruno's as defendants. They have 30 days to respond to the complaint. No hearings were scheduled as of late last week.
The tug-of-war began last month, when Bruno's and SHI struck a deal. The court papers said Bruno's entered an acquisition deal with SHI on May 23. However, SHI was required to notify Fleming, Seessel's supplier, because the wholesaler has the right of first refusal, or the right to match a prospective buyer's offer -- a right spelled out in agreements between SHI and Fleming in 1988, when the wholesaler acquired Seessel's previous supplier, Malone & Hyde.
On May 31, Fleming informed SHI that it would exercise its first refusal right and buy Seessel's, court documents said. Bruno's claims Fleming's offer is not valid and SHI should proceed with its decision to sell Bruno's its stock. The dispute led SHI to file a complaint to let the court decide the rightful buyer.
"We think we have a solid case on our hands. We think we have matched Bruno's offer. That was our intent," said Fleming spokeswoman Nancy Del Regno. "We feel real comfortable with our offer and look forward to clearing this up in the courts."
Bruno's spokeswoman Catherine Byrd said, "Bruno's has reached an agreement with Seessel's, and we are confident that we will be successful in completing the transaction."
If the judge rules for Fleming, the company plans to resell SHI to Schnuck and remain its supplier for a specified amount of time, Del Regno said.
"Schnuck Markets has a definite interest in acquiring Seessel's Holdings Inc. of Memphis. We had been pursuing an acquisition of them for some time," said Craig D. Schnuck, chairman and chief executive officer, noting the Seessel's units would be Schnuck's first Tennessee stores. "Seessel's is a well-run company with an excellent reputation in a growing market. It would be an attractive addition to our company."