Company says move will facilitate its strategic transformation
The change in corporate structure would help enable the company’s strategic transformation, according to Supervalu proposal, which was outlined in a preliminary proxy statement/prospectus filed with the U.S. Securities and Exchange Commission. According to the proposal, the move would:
- Further separate Supervalu’s wholesale and retail operations “in an operationally efficient and strategic manner.”
- Facilitate the sale of certain retail assets to third parties as part of the company’s previously announced strategic transformation plan.
- Better segregate the liabilities of the company into their respective business segments.
- Increase the company’s strategic, business and financial flexibility.
- Reduce the tax liability associated with Supervalu’s strategic transformation plan, potentially generating about $300 million worth of cash tax benefits for the company over the next approximately 15 years.
“We have been executing a strategic transformation of our business over the last two years to become the wholesale supplier of choice for grocery retailers across the United States, while also executing initiatives to deliver long-term stockholder value,” Supervalu president and CEO Mark Gross said in a statement. “The proposed holding company structure is another significant and important undertaking by our team that would support and advance our transformation by further separating our wholesale and retail operations in a tax efficient manner.”
Supervalu stockholders will vote on the holding company proposal at the company’s 2018 annual meeting, which is set for July 19.