AGREEMENT ON RALPHS SALE TO YUCAIPA REPORTED NEAR

ELLIOT ZWIEBACH

COMPTON, Calif. -- The sale of Ralphs Grocery Co. here to Yucaipa Cos. could be agreed to in the next few days, industry sources told SN last week. Even if the deal is delayed beyond this month, one source familiar with the negotiations said, an agreement should be reached at the latest by Thanksgiving.

Yucaipa, which is based in Los Angeles, Calif., has been negotiating the deal for several months with DeBartolo Corp., which owns just over 60% of Ralphs' stock. Yucaipa owns Food 4 Less Supermarkets, La Habra, Calif.

The deal is valued at about $2.5 billion, including the assumption of Ralphs debt, sources said.

Executives of the companies involved declined to comment on the negotiations last week.

Sources familiar with the negotiations said the deal would involve Yucaipa buying DeBartolo's Ralphs stock and then merging Ralphs and Food 4 Less Supermarkets into a single entity.

This merged operation would create the largest supermarket chain in southern California. Ralphs, which operates about 65 stores, had sales of $2.7 billion in the year ended Jan. 30. Food 4 Less, which operates about 130 Alpha Beta supermarkets and about 70 other stores, also reported sales of about $2.7 billion in the most recent fiscal year.

"It's important for both De Bartolo and Yucaipa that an agreement is made before the Thanksgiving holiday," a trade source told SN. "Neither company wants to be in the financial market after Thanksgiving.

"In addition, DeBartolo has certain financial obligations due prior to the end of the year, so it's important for the deal to close before then. And from Yucaipa's standpoint, it wants the deal in place and the two companies integrated before the holidays so it can hit the road running in January," the source said.