RESTRUCTURING IN DOMINICK'S FUTURE?

ELLIOT ZWIEBACH

NORTHLAKE, Ill. -- The DiMatteo family, which owns Dominick's Finer Foods here, is reportedly considering a variety of options regarding the chain's future, trade sources told SN.

Those options include a restructuring that would include existing management and an independent investment group -- reportedly the likeliest scenario; an outright sale of the chain, possibly to another operator, or a public stock offering.

The company declined comment on the reports last week. However, reports circulating in the trade last week were the strongest to date that the family does plan to dispose of its holdings, reportedly at an asking price of $700 million, which would include assumption of debt by the eventual buyer.

Dominick's operates 101 stores, with sales estimated at $2 billion. It operates 58 stores under the name Dominick's Finer Foods; 22 Dominick's Food & Drugs; 16 Omni superstores, and five Dominick's Fresh stores.

Among potential investment groups are Freeman Spogli & Co., Los Angeles, which owns Purity Supermarkets, North Billerica, Mass.; Kohlberg Kravis Roberts & Co., New York, which owns Safeway, Oakland, Calif., and Yucaipa Cos., Los Angeles, which owns Smitty's Super Valu, Phoenix, and is on the verge of merging its Food 4 Less Supermarkets, La Habra, Calif., with Ralphs Grocery Co., Compton, Calif.

Executives at Freeman Spogli declined comment, and executives at KKR and Yucaipa could not be reached for comment.

Among operators that may be talking with Dominick's are Albertson's, Boise, Idaho and Supervalu, Minneapolis, which operates Cub Foods, Stillwater, Minn.

Officials at Albertson's and Supervalu declined comment.