KROGER TRADING REIGNITES BUYOUT SPECULATION
CINCINNATI — A rise in credit default swaps and heavy volume in stock option positions in Kroger last week raised anew rumors that the retailer here could be the target of private equity interests. An observer quoted in a Reuters report said, “They are possibly in play right now.” Credit default swaps, or the cost to insure Kroger's debt, climbed by around 4 basis points Tuesday. Similar activity in April initially aroused speculation that Kroger could be a leveraged buyout candidate and prompted David Dillon, Kroger's chief executive officer, to state that the company was not for sale. Stock options, or rights to buy stock in Kroger at a determined time and price, surged by around 10 times their normal volume last week, reports said.
TESCO LAUNCHES INCENTIVE PLAN FOR U.S. EXECUTIVES
LONDON — Tesco here is implementing a special bonus for Sir Terry Leahy, its chief executive officer, and incentives for other Tesco executives involved in the company's expansion into the U.S. with its Fresh & Easy Market format, according to published reports here. The incentive plan — reportedly linked to profitability of the U.S. venture based on return-on-capital-employed — will deliver Tesco shares to Leahy and any U.S.-based executives who opt to participate, the reports said. An article in the Financial Times of London last week quotes Tesco as saying it felt it needed the plan “to ensure it could attract great talent” for its U.S. operation. Leahy could get up to 2.5 million shares as a one-time award if Fresh & Easy hits its ROCE targets, the newspaper reported; other executives could earn shares if ROCE hits 4% to 6% in 2010-2011 and 10% to 12% in 2013 and 2014, the paper reported.
TWO MORE PLEAD GUILTY IN STOP & SHOP ID THEFT
PROVIDENCE, R.I. — Two more men admitted here last week to stealing credit card information from Stop & Shop customers by switching out the PIN-pad card readers at the stores' checkout lines. Arman Ter-Esayan and Gevork Baltadjian pleaded guilty to aggravated identify theft, a federal offense, which carries up to a two-year prison sentence, according to reports. They also pleaded guilty to conspiracy to traffic in unauthorized access devices, which carries a five-year maximum sentence. As previously reported, a third accused accomplice in the scheme, Arutyun Shatarevyan, has agreed to plead guilty. A fourth man also is accused in the case, which involved several Stop & Shop locations in Rhode Island and Massachusetts.
FIRED WAL-MART AD EXECUTIVE ACCUSES OTHERS
BENTONVILLE, Ark. — Julie Roehm, the former marketing executive at Wal-Mart Stores here who is suing and being sued by the giant retailer, said in a court filing in Detroit last week that other top executives had violated the company's ethics policy by accepting gifts from vendors. H. Lee Scott, chief executive officer, received discounts on expensive merchandise, including a diamond for his wife, she said, while John Fleming, chief marketing officer, accepted tickets to an Eagles concert in Spain. “This lawsuit is about Julie Roehm and her misconduct,” Wal-Mart spokesman John Simley said in a statement. “Her document shows how weak her case is.” Roehm was fired last year, and Wal-Mart later disclosed in a suit against her that it had accused her and a subordinate, Sean Womack, of accepting gifts from advertisers and of having an affair.
KROGER REACHES LABOR AGREEMENT IN DETROIT
DETROIT — United Food & Commercial Workers Local 876 here said it has reached a tentative agreement with Kroger Co., Cincinnati, on a new contract covering about 9,900 workers at 101 stores in the Detroit area. Roger Robinson, president, Local 876, said that a specific date had not yet been set for members to vote on the proposal. He declined to comment on details of the agreement.