Albertsons mulls buying high-end grocer Whole Foods

Albertsons Cos Inc, the second largest operator of grocery stores in the US, is mulling buying high-end grocer Whole Foods Market Inc, the Financial Times yesterday reported, citing people familiar with the matter

Private equity firm Cerberus Capital Management, which backs privately-held Albertsons, has held preliminary talks with bankers about tabling an offer, the report said, and added that no formal offer has yet been made.

Albertsons, which is controlled by group of investors, including Cerberus Capital, Kimco Realty Corp, Schottenstein Stores, did not react to the report.

Earlier this month media reports had speculated that Whole Foods will become a takeover target after activist investor Jana Partners built up a 9 per cent stake and urged the company to consider putting itself up for sale because of its "chronic underperformance".

Jana, now the second-largest shareholder of Whole Foods, has also threatened to make changes in the board and senior management of the grocery chain.

Whole Foods has reported sales decline in six consecutive quarters, which forced the company to shutter several stores and cut costs.

Whole Foods, based in Austin, Texas, has a current market value of about $11 billion.

Founded in 1978, Whole Foods has 462 stores worldwide, 87,000 employees and sales of $4.9 billion in its fiscal first quarter.

Based in Idaho, Albertsons is the second largest supermarket chain in North America after Kroger.

It has 2,200 stores and employs over 250,000 people.