CONCERNS ABOUT ARGENTINA PARTNER, U.S. TAX LAWS PRESSURE AHOLD STOCK

DAVID GHITELMAN

ZAANDAM, Netherlands -- Investor concerns about the potential bankruptcy of Ahold's Argentinean retail partner and possible changes in U.S. tax laws sent the stock of Ahold here down more than 11% in a single day's trading early last week.

Although a company spokeswoman told SN that nothing had changed in the Argentinean situation and that it was too early to speculate on how a U.S. tax law change could affect the company, a U.K.-based equity analyst said the company was suffering from a lack of confidence among investors.

The spokeswoman explained that while the Argentinean government has suspended the operations of Banco Velox, a subsidiary of the Velox Group, Buenos Aires, Ahold owns the Disco supermarket chain in partnership with Velox Retail Holdings, a different subsidiary of the Velox Group.

"The Velox bank has been suspended," she said. "Velox Retail Holdings is a different entity."

She added that despite the growing concern, the company saw no need to make an additional public statement. "It should be quite clear to the financial community what our situation is over there. There is nothing wrong with our partner in Argentina, just speculation about future developments."

However, Christopher Gower, a London-based equity analyst for Lehman Bros., New York, said investors are concerned that if Velox Retail Holdings declares bankruptcy, Ahold might have to pay nearly $500 million for its share of Disco, an investment that is only worth about $80 million.

Adding to concerns about Ahold, according to Gower, was an article published the previous week in London's Financial Times that said Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, was drafting legislation that would increase tax rates for the U.S. subsidiaries of multinational corporations such as Ahold.