TWIN COUNTY IS EXPLORING MERGER, SALE, PARTNERSGIP

GREG GATTUSO

EDISON, N.J. -- Twin County Grocers here has retained Wasserstein Perella & Co., Chicago, as financial adviser to "explore strategic alternatives," which could include a sale or a merger, officials told SN late last week.

"We are on a road to explore various options that are in front of the company," said Twin County's chief executive officer, Jim McGuire. "One is a partnership, the second is merger. The third may be a sale. We have retained Wasserstein Perella to assist us in that exploration."

Twin County has been approached by potential buyers in the past, McGuire said, but has not received any recent offers.

McGuire said the retention of the financial adviser was "somewhat related" to an alleged embezzlement scheme in which a group of three ex-officials and seven others are accused of stealing $12.7 million from the company between 1993 and 1997.

McGuire acknowledged that the alleged theft, which came to light in April 1997 and was made public in January, negatively affected Twin County's finances. He declined to provide other details.

As reported in SN earlier this year, Twin County filed a civil lawsuit against the group and is seeking to recover treble damages -- about $38 million -- under the Racketeer Influenced and Corrupt Organizations Act.

Twin County has distribution facilities here and in West Nyack, N.Y. Its 29 members own about 124 supermarkets trading under the Foodtown and D'Agostino banners in New York and New Jersey, and the Grande banner in Puerto Rico. Twin County's annual volume is about $1 billion.

McGuire said the cooperative's members view the engagement of the financial adviser as "a very positive step."

"We feel we have a very strong Foodtown group and trade name, a very strong member in D'Agostino, and a very strong member in Grande in Puerto Rico," McGuire said. "We are looking to continue to provide them with a strong source of supply. And for this reason, going forward, we engaged Wasserstein to assist us in looking at various alternatives."

Tom Kichler, a director at Wasserstein Perella, told SN the firm will make its recommendations to Twin County's board of directors sometime in the future.