JITNEY JUNGLE, INVESTMENT FIRM MERGE

ELLIOT ZWIEBACH

JACKSON, Miss. -- Jitney Jungle Stores of America here completed its merger with a New York-based investment firm last week -- possibly the first step toward a public stock offering, the company reported.

The merger -- a recapitalization valued at $350 million -- involves Bruckmann, Rosser, Sherill & Co., New York, and members of the chain's management team, including W.H. Holman Jr., chairman; Roger Friou, president; David Essary, executive vice president; and W.H. (Hank) Holman 3rd, corporate secretary and president of Pump & Save, a gas station subsidiary. BRS said it will retain senior management. Holman Jr. said the merger provides the chain with the resources and flexibility to pursue expansion plans and enhance its potential for future growth, "and it presents Jitney with the opportunity to become a publicly held company in the future." According to Friou, "A management team must do what is best for the company, its owners and employees. Certainly, we will look seriously at the possibility of becoming a public company."

Industry observers told SN a public offering is probably at least a year off. "The company has a lot of stores in the 26,000-square-foot range, and it expects to convert several to the 55,000- to 60,000-square-foot range, which will be the sizzle in any equity offering," said Fred Taylor, an analyst with Salomon Bros., New York. "Jitney Jungle has already converted one store to a Premier format, with another Premier due to open later this month, and if it can pull off a number of similar conversions, investors will be very open to a public offering." Potential investors are "relatively optimistic" about the chain's prospects for an equity offering, Taylor said, "because Jitney Jungle has a defensible geographic niche, given its dominant share in the Jackson market." Jitney operates 104 supermarkets under the names Jitney Jungle, Sack & Save and Megamarkets, plus 43 Pump & Save gas stations.