Kroger (KR) May be Possible Suitor for Recovering A&P

July 25, 2013 2:57 PM EDT
Kroger (NYSE: KR) is on watch Thursday afternoon following headlines that the Great Atlantic & Pacific Tea Co. might look to sell itself following its exit from bankruptcy.

The WSJ said today that GA&P Chairman Gregory Mays sent a letter to store managers which set out a slew of options for the company moving forward, which includes seeking financing and exploring strategic alternatives. One person familiar with the company's thinking said the latter is the most plausible.

Analysts think that GA&P could go for $500 million to $1 billion or more, though discussions are early in the process.

Aside from Kroger, other potential buyers include Koninklijke Ahold and private equity giant Cerberus Capital Management, among others.

GA&P emerged from bankruptcy in March 2012. The company had raised $490 million in debt and equity financing and has since been able to increase liquidity by $200 million while cutting debt obligations by 30 percent, the WSJ said, noting an internal memo.

Kroger is near session highs, up about 1 percent today.

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