Acme’s parent firm Albertsons said to be shopping ACME and its other grocery chains

Albertsons Cos., the parent company that owns Malvern-based Acme Markets, may be looking to unload some of its nearly two dozen grocery chains as the company launches a review of its business strategy, analysts said.

Selling off pieces of the company would reward Cerberus Capital Management and Philadelphia-based Lubert-Adler Partners, two large investment firms that ushered Albertsons into the public markets and now own near half its shares. As of December, New York City-based Cerberus held a 32% stake and Lubert-Adler, 12%. The firms didn’t respond to requests for comment.

The Boise, Idaho-based supermarket operator went public in 2020, selling about 50 million shares at $16 a piece. Since the IPO, share prices have risen about 85% before the announcement of the review Monday bumped up the stock even further as Wall Street welcomed the move. Share prices closed at $35.70 Thursday, a rise of $3.70, or more than 11%.

» READ MORE: Acme grocery chain is being sold to investment group

Albertsons, the second-largest grocer in the U.S. behind Kroger, put out feelers to possible suitors in its Feb. 28 announcement. The company said the review, aided by Goldman Sachs and Credit Suisse, would include mulling “potential strategic or financial transactions” and entertaining “inquiries,” typically outside offers of possible mergers or acquisitions.

“The board believes the continuing strength of our business and the scale of our portfolio of assets warrants a deep and considered review of all possible paths towards maximizing value creation,” said Chan Galbato, board co-chair, in a statement. Galbato is chief executive officer of Cerberus Operations, which provides operational guidance to companies in Cerberus’ portfolio.

Albertsons didn’t give a timetable for the review, gave no indication that it was leaning toward any strategic direction, and added that the review could result in no action at all. A spokeswoman said Albertsons had no further comment.

“These investors buy assets for a song, put a little money into it, make the stores better, then sell at a profit. Now they want to get some good returns on that,” said John Stanton, a professor of food marketing at St. Joseph’s University in Philadelphia. “Their real business is selling companies, not food. That’s what you hire investment bankers for, to sell assets.”

Acme could be sold “as real estate,” to other store chains, said Stanton, who is not connected to the review. Acme, based in East Whiteland Township has about 161 stores in Connecticut, Delaware, Maryland, New Jersey, New York, and Pennsylvania.

Though the review caught some industry observers by surprise, analysts from Morgan Stanley to Guggenheim speculated that parent company Albertsons could be worth more in pieces, providing a hefty payout for its larger investors. Albertsons operates about 2,300 supermarkets, 1,700 stand-alone pharmacies, 400 gas stations, and dozens of warehouses and food processing plants, spread among 34 states. Besides Acme, Albertsons’ major brands include Safeway, Jewel Osco, and Vons.

Albertsons and other grocers have felt increasing pressure, not just from Walmart, whose in-store markets rank it with the largest supermarket operators, but also Amazon, whose same-day deliveries and purchase of Whole Foods have positioned it to sell more groceries. Grocery consultants say even the largest chains will have to spend more on marketing, inventory, automation and delivery services to protect market share.

Cerberus’ past investments include Chrysler Corp.; one of its current ventures is FirstKey Homes, which has bought 25,000 suburban houses across the country to rent out.

Philadelphia-based Lubert-Adler is a real estate company whose major investors include Pennsylvania’s state pension funds. Partner Dean Adler was an architect of the investment funds’ purchase and expansion of Albertsons in the early 2000s in hopes of cutting costs and boosting sales under a single management team.