Sale reportedly now more likely than spin-off

EDEN PRAIRIE, Minn. — Supervalu Inc. said it is evaluating a sale of its Save-A-Lot business as an option for executing its plan to separate the discount grocery chain from the company.

Earlier this year Supervalu filed plans with regulators to spin off the division as a separate public company. This week’s announcement that it will also consider a sale comes as some buyout firms are preparing offers for the discount grocery chain, according to Thomson Reuters, which cited people familiar with the matter in reporting that a sale is now more likely than a spinoff.

Supervalu said in an August 2 statement that it is continuing to pursue a spinoff but is “prepared to consider other alternatives to improve stockholder value, and in this regard is also evaluating a possible sale of Save-A-Lot.”

Save-A-Lot has been a bright spot for Supervalu, as it has attracted cost-conscious consumers. Supervalu officials last summer said splitting off that chain could enable the company to focus on its other 200 grocery stores, like Farm Fresh and Cub Foods, and its wholesale business, one of the largest in the country. Supervalu also said capital raised in a spinoff could be used to make Save-A-Lot more competitive.