Kroger (KR) Marked as Possible Takeover Target
Down)
In an article over the weekend, Bloomberg highlighted Kroger (NYSE: KR) as a possible takeover target. The stock is now trading at an 86 percent discount to expected sales for this fiscal year.
Kroger, the largest U.S. grocery store chain, has seen annual sales growth since 1987 and is only trading at 10.8 times its estimated earnings for this year, the lowest multiple among U.S. food retailers of its size.
Some possible acquisition candidates include Royal Ahold NV, Tesco Plc, Delhaize Group SA, Bottom Dollar Food and Hannaford, according to Bloomberg. European firms may look to acquire Kroger to help offset some of the weakness in the current economy. For 2012, economists forecast US growth of 2.3 percent, while Europe is expected to contact by 0.5 percent.
Analysts believe an offer for Kroger may represent a 30 percent premium to its current trading value.
Since June of 2009, shares of Kroger have risen more than 10 percent, while the S&P 500 has grown 41 percent. Shares of Kroger trade at a lower multiple than 488 of the 495 companies within the S&P 500.
Shares of Kroger are trading up 0.3 percent to $23.99 at last check.
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Kroger, the largest U.S. grocery store chain, has seen annual sales growth since 1987 and is only trading at 10.8 times its estimated earnings for this year, the lowest multiple among U.S. food retailers of its size.
Some possible acquisition candidates include Royal Ahold NV, Tesco Plc, Delhaize Group SA, Bottom Dollar Food and Hannaford, according to Bloomberg. European firms may look to acquire Kroger to help offset some of the weakness in the current economy. For 2012, economists forecast US growth of 2.3 percent, while Europe is expected to contact by 0.5 percent.
Analysts believe an offer for Kroger may represent a 30 percent premium to its current trading value.
Since June of 2009, shares of Kroger have risen more than 10 percent, while the S&P 500 has grown 41 percent. Shares of Kroger trade at a lower multiple than 488 of the 495 companies within the S&P 500.
Shares of Kroger are trading up 0.3 percent to $23.99 at last check.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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