By
Godfrey Benjamin
May 13th, 2024
Albertsons supermarket has just announced its decision to go public with its downsized IPO. The Cerberus with a 31.9% stake in Albertsons post-IPO believes the company will achieve success when market demands stabilize.
The real test of a company’s growth is its stride to scale up in a bid to get listed on a stock exchange. The hurdles to cross the listing process are as varied and related to the company’s resilient history as well as their unique offering which future investors can trust to see future growth. While all companies have the vision to grow and go public, the majority do not have the tenacity to cross the listing process. However, Albertsons has just announced it will power by going public with its downsized IPO.
The listing of Albertsons Inc on the New York Stock Exchange (NYSE) comes after several attempts by the supermarket store to go public, the last of which was in 2015. Albertsons’ major investor is Cerberus Capital Management LP who has made dogged attempts to take the company public. The company’s failure to impress has forced investors like Rite Aid Corporation (NYSE: RAD), a pharmaceutical outlet to frustrate Albertson’s attempts of a merger.
Albertsons’ History
Albertsons was founded by Joe Albertson on July 21, 1939, in Boise, Idaho. An ad in the Idaho Statesman newspaper touted Joe Albertson’s first store as “Idaho’s largest and finest food store.” The store was filled with perks that, at the time, were brand new: free parking, a money-back guarantee, and even an ice cream shop. The original store was built onto several times, but it was demolished in 1979 and a replacement store built on the same property. A brick monument stands on the northwest corner of 16th and State Streets in downtown Boise, commemorating the original store.
Albertsons saw serious expansion in the 1990s. It successfully acquired American Stores, Formerly known as Skaggs Drugs Cos. The Skaggs acquisition was a success, and the new stores were integrated into Albertsons’ Southern division. On July 18, 2001, Larry Johnston, the then chairman, and CEO of Albertsons, announced it would close 165 “underperforming” stores spread across 25 states, cut jobs, and reduce its newly created operating divisions. This restructuring set the framework up until the company was sold to SuperValu and subsequently to Cerberus Capital Management in 2013.
Albertsons Troubled IPO Attempts
Acquiring a company that got removed from the NYSE back in 2006, Cerberus has tried to take the company public but with many obstacles. Albertsons attempted to IPO with the ticker ABS on October 14, 2015, planning to raise as much as $1.7 billion, selling 65.3 million shares with a range of $23 – $26 per share. However, the company postponed the listing due to market conditions, particularly after Walmart Inc (NYSE: WMT) warned of more challenged sales earlier that day and the company was forced to postpone the IPO indefinitely.
The company’s present-day IPO attempt comes after the sale was boosted due to increased demand fueled by the coronavirus pandemic which made Albertsons see a 34% increase in sales as compared to March/April sales in 2019.
Reuters reported that Albertsons said it sold shares in its IPO at $16 a piece, below its $18-$20 target range. This values the company at around $9.3 billion, excluding its $8.5 billion debt pile as of the end of February. The Boise, Idaho-based company also cut the number of shares sold to 50 million from 65.8 million. The company based on forced agreement from JPMorgan Chase and Co (NYSE: JPM), BofA Securities, and Goldman Sachs Group Inc (NYSE: GS) eventually downsized the IPO which billed to start trading with the ticker symbol ACI.
Off to a rocky start, the Cerberus with a 31.9% stake in Albertsons post-IPO believes the company will thrive when market demands stabilize. In general, the eventual listing of Albertsons shows resilience which can endear investors to deal with the company in the future.