C&S ONLY BIDDER FOR FLEMING ASSETS; SOME RESALE EXPECTED

Mark Hamstra

DALLAS -- Fleming Cos. here said last week the proposed $400 million acquisition of its supermarket wholesale operations by C&S Wholesale Grocers, Brattleboro, Vt., will go before the bankruptcy court for approval today after no other qualified bidders emerged.

However, C&S is expected to sell portions of that business to other wholesalers. Supervalu, Minneapolis, has shown strong interest in acquiring at least three Fleming distribution centers, according to sources close to the situation. The three facilities -- in Tulsa, Okla.; Nashville, Tenn.; and Garland, Texas -- are among the 12 full-line DCs that Fleming had not planned to close.

"I don't think C&S has any interest in operating those locations," one source said about the three DCs. Other wholesalers also have been contacted about acquiring some of the facilities, the source said.

The Food Partners, Washington, an investment firm specializing in the food industry, has been working with C&S to find buyers for much of the business C&S is set to acquire, SN has learned. The Food Partners could not be reached for comment.

Jeff Noddle, chairman, president and chief executive officer, Supervalu, previously said the company might be interested in some of Fleming's assets, although the company declined to comment further last week.

Under one potential scenario, the C&S acquisition could close by mid-August, after which Fleming would continue to operate the facilities for several months under a transitional contract, a Fleming spokesman told SN last week. He said he had no information about C&S' potential plans to re-sell some of the facilities, and C&S could not be reached for comment.

Supervalu also was reported to have also been interested in Fleming's Sentry franchise, through which about 53 stores in Wisconsin are licensed from Fleming by individual operators.

C&S has been exploring its options for Fleming's Piggly Wiggly franchise, according to David Schools, senior vice president and chief operating officer, Piggly Wiggly Carolina Co., Charleston, S.C. "They've asked us for some opinions, but we don't know what they want to do," he said. "I think we'd be interested in it. Obviously, that would depend on the transaction cost. We just operate in South Carolina and a little bit in Georgia, but we'd be willing to look into it a little further."