SYRACUSE, N.Y. — Tops Friendly Markets' $85 million-plus bid for Penn Traffic here appears to be a winner, the chief executive officer of rival bidder Price Chopper Supermarkets told SN last week.
“To the best of my knowledge, there was no other bidder [to rival that offer],” said Price Chopper's Neil Golub. “The combination of the compensation and money they were able to offer were more than any other bidder.”
Bidding was scheduled to close late last week, and the bankruptcy court in Wilmington, Del., is expected to make a decision on the winner this week.
As previously reported, Price Chopper's $54 million offer for 22 P&C locations was higher than Tops' bid on a per-store basis, but the total payout to creditors under Tops' plan to acquire all 79 of Penn Traffic's locations was set as the bid to beat.
Golub said at one point Price Chopper had been a part of the Tops bid — which is being financed by Tops' owner, Morgan Stanley Private Equity, but ended up making a separate offer for the 22 locations it wanted.
“We felt we had a pretty good shot at getting those stores, but as the court made the decision based on the recommendations from the Penn Traffic committee and the creditors committee, and so on, it just didn't hold up,” he said.
Golub also confirmed a local report in Business First of Buffalo, N.Y., that Price Chopper did not intend to file a lawsuit against Penn Traffic for pursing the sale of the stores Price Chopper had agreed to buy.
“The reality was we had a contract with Penn Traffic, and part of that agreement was that they wouldn't go around and peddle those stores, and they did,” he said. “Under other circumstances, we felt we would have had a claim, but with the bankruptcy court, it was going to be a waste of time and effort. We have better things to do, like growing our business.”
Despite a union campaign — joined by Sen. Charles Schumer, D-N.Y. — supporting the Tops offer, Golub said his company's bid would have resulted in more job creation. Price Chopper, which is nonunion and would not have kept the current union contract in place, would have employed an estimated 3,200 to 3,600 people at the acquired locations, he told SN.
“Our contention was that we would hire 30% more people than were already working,” Golub said. “When Schumer came into it, it became a different issue. Clearly his concern was keeping union jobs, not creating new jobs.”
In addition, Price Chopper would have invested “a couple of million dollars” renovating each store it acquired, he added.
Under Tops' bid, an unspecified number of locations will be closed.
“We wish them luck,” Golub said. “[Tops CEO] Frank Curci is a good guy and an experienced retailer.”
