NEW YORK -- Gristede's Foods here will become a private company, effective around June 30, John Catsimatidis, chairman and chief executive officer, said last week.
Catsimatidis, who owns more than 90% of the Gristede's stock personally or through Red Apple Group here, of which he is the sole owner, said he intends to acquire publicly held shares of Gristede's for a price of 87 cents per common share. Consummation of the merger will be subject to a definitive agreement, along with regulatory filings; once his acquisition of the publicly held shares has been completed, the shares will be delisted from trading on the American Stock Exchange, Catsimatidis said.
He said the company would consider offering shares to the public again if the company makes another big acquisition. Gristede's made an unsuccessful bid last year to acquire Kings Super Markets, Parsippany, N.J.
Red Apple has owned the Gristede's banner since 1986. It began buying units of Sloan's Supermarkets here in 1991 and, when it acquired the balance of Sloan's in 1998, the company went public. A year later it combined the Gristede's and Sloan's stores under the Gristede's banner.
Gristede's said the opening of seven new stores during 2003 boosted sales but contributed to a loss for the year ended Nov. 30. Sales for the year increased 11.6% to $279.7 million, but the company had a loss of $927,407 for the year; the company did not release same-store sales for the year or break out fourth-quarter results.
The company said earnings before interest, taxes, depreciation and amortization fell 22.2% to $8.5 million due to the costs and promotional pricing associated with the new store openings. For stores open more than a year, EBITDA rose 11.9% to $12.1 million, the company indicated.
Gristede's said the negative impact on EBITDA of the seven new stores was approximately $3.5 million. In addition, two stores closing during the year had a negative impact of approximately $200,000 on EBITDA, the company added.