FOOD 4 LESS PARENT IN TALKS TO BUY SMITTY'S

PHOENIX -- Yucaipa Cos., the Claremont, Calif.-based investment company that owns Food 4 Less Supermarkets, La Habra, Calif., is negotiating to acquire Smitty's Super Valu here, trade observers said last week. Smitty's, which operates 29 stores here and in Tucson, Ariz., has been owned by Steinberg Inc., Montreal, since 1981. Steinberg, a holding company whose only asset is Smitty's, is owned by Socanav, Montreal, a diversified conglomerate. Smitty's sales volume is estimated to be $700 million annually. Steinberg said last November it would be interested in selling the chain and sources said an all-cash deal was preferred. Steinberg has put Smitty's up for sale on at least two previous occasions since 1989, but industry observers said Steinberg may be feeling greater financial pressures, making the sale of Smitty's more likely this time.

., about a possible acquisition of that chain. "Yucaipa is capable of running two deals at the same time," one observer noted. "It acquired Boys Markets in southern California and Almacs in Rhode Island within 30 days of each other, and it bought Alpha Beta within 30 days of selling Almacs," he said. "Yucaipa's philosophy is to do it when the deal is available."