LBO Speculation Hot and Heavy on SUPERVALU (SVU) as Cerberus Lines Up Financing

Adding more credence to private equity takeover speculation of SUPERVALU, Inc. (NYSE: SVU), Debtwire is now reporting that Cerberus Capital Management is seeking to arrange $4-$5 billion in debt financing to back a bid for the embattled grocery chain.

As noted earlier, credit analysts at JPMorgan upgraded SUPERVALU bonds from Underweight to Neutral citing a 50 percent chance of a LBO. "We are upgrading the credit from Underweight to Neutral as we believe the solid liquidity and now potential interest in the business will support the bonds," analyst Carla Casella said.

Interestingly, JP Morgan Chase and Bank of America are among the banks considering a syndicate, the report said.

With the company's earnings report October 18, SUPERVALU disclosed it has received "a number of indications of interest and is in active dialogue with several parties."

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