AMSTERDAM - Some large investors are preparing to bid on Ahold's U.S. Foodservice division, according to reports last week.
Those same reports said Ahold here is expected to publicly disclose an update on its strategic review in about a week. The company has declined to disclose when it would release the results of the review, other than to say it would be sometime this fall.
In addition to the previously reported interest in U.S. Foodservice by London-based Blackstone Capital Partners, the reports said New York-based private equity firms Kolberg Kravis Roberts and Cerberus Group were "among the interested parties." South African distribution concern Bidvest also was said to be interested. One report last week also said Blackstone could be interested in buying all of Ahold.
Some analysts had speculated that Ahold would seek to further improve the operations at U.S. Foodservice before seeking to divest it. However, after reports that Ahold was considering a merger with Brussels-based Delhaize, analysts said selling U.S. Foodservice could be done as part a complicated deal to unite the retail operations of the two multinational companies.
Patrick Roquas, an analyst with Rabobank Securities, Amsterdam, suggested that Ahold could reap proceeds of about $8.25 billion from the sale of U.S. Foodservice and its stake in two European joint ventures, ICA and JMR. U.S. Foodservice alone has been valued by analysts at about $5 billion.
In a report last week, debt ratings firm Fitch Ratings said a Delhaize-Ahold merger "makes sense from a geographical point of view," but noted that Ahold would need to simplify its debt structure and further streamline its operations.
"Ahold's management had several times affirmed its commitment to U.S. Foodservice, but pressure from shareholders could lead to the disposal of this activity," Fitch said in its report, noting that it "takes a positive view of such a disposal, whose cash proceeds can be allocated to debt reduction."
In the first half of 2006, U.S. Foodservice reported operating income of $159 million on sales of $10.2 billion, up 3.2% over year-ago levels.