A recent report by The Wall Street Journal suggests that one of the nation’s largest grocery retailers may be headed into uncertain territory—with activist investors looking to gain control of SuperValu’s board, urging a breakup of wholesale and retail divisions, and potentially eyeing a sales.
According to the news source, Blackwells Capital LLC, an investment group that owns approximately 4.35 percent of SuperValu’s stock, privately approached the retailer’s board of trustees, asked that Blackwells be given three seats on the board, and detailed plans to form a committee to review potentially separating Supervalu’s retail and wholesale divisions in preparation for the sale of the company’s wholesale business. The board rejected the request, instead issuing an outline of its strategic goals moving forward.
“Discussions encompassed a variety of topics pertaining to the business and the Company’s ongoing initiatives as well as our Board refreshment efforts—initiatives that have been underway substantially since before Blackwells became a stockholder,” SuperValu noted in its statement. “Despite our efforts to reach a constructive path forward and to discuss overlapping objectives, Blackwells has decided to threaten an unnecessary and counterproductive proxy contest.”
The retailer also highlighted the various ways in which the company has been growing its wholesale operations, noting: “SuperValu has been rapidly and strategically transforming its business to become a wholesale company focused on the distribution of consumable products across the United States. Sales from SuperValu’s wholesale operations are now approximately 75 percent of its total annual sales, up from approximately 44 percent only two years ago.”
Highlighted initiatives and strides the company has taken to strengthen its business include:
Will activist investors be satiated by SuperValu’s renewed focus, or will they continue to make efforts to push for a sale? Deli Market News will continue to report with updates.