SUPERVALU CAPS SHOPKO DIVESTURE

MINNEAPOLIS -- Supervalu here completed its divestiture of Green Bay, Wis.-based ShopKo Stores last Wednesday, raising $305 million in the process. The company said it used the proceeds to repurchase 6.9 million of its own common shares.

upervalu received net proceeds from the transaction of $155 million, after underwriting expenses, which it immediately used to buy back its own shares.

Supervalu also completed a linked sale on Wednesday of 8,174,387 shares back to ShopKo for the previously agreed upon price of $18.35 per share, or $150 million.

Supervalu said it has 60.5 million shares outstanding, and its board has authorized the company to buy back another 1.6 million shares. The company said the use of the ShopKo proceeds to buy back stock will have a "minor dilutive effect" on fiscal 1998 earnings per share, but will increase earnings per share in subsequent years.

Supervalu has held a 46% investment in ShopKo since 1971. It has expressed an interest in divesting the discount chain in order to focus on its food business. Goldman, Sachs & Co. was managing underwriter for the offering, with Merrill Lynch & Co. and Salomon Brothers acting as co-managers.

The wholesaler also announced last week that the executive behind the ShopKo divestiture and many other financial and technology transformations over the past six years, Jeffrey Girard, will resign effective at the end of this month.

Girard, who is executive vice president and chief financial officer, said his major goals have been achieved, and he intends to search for opportunities in a general management role, or possibly launch an entrepreneurial venture. Girard has spent virtually all of his career in the supermarket industry, beginning with 17 years at Supermarkets General Corp.

In addition to the ShopKo sale, Girard played a key role in Supervalu's acquisitions of Scott's Food Stores, Sweet Life Foods and biggs Hyper Shoppes.