Grocery distributor Supervalu Inc (SVU.N) is preparing to explore an outright sale as an alternative to a spin-off of its discount grocery retail chain Save-A-Lot, according to people familiar with the matter.
Eden Prairie, Minnesota based Supervalu has received interest in Save-A-Lot from several private equity firms, and has told them that it will consider offers once it registers the unit with regulators for a spin in early 2016, the sources said this week.
While a spin would be more tax-efficient for Supervalu, private equity firms are hoping to take advantage of a so-called tax shield resulting from a loss in Supervalu's $3.3 billion sale of supermarket retailer Albertsons Inc (ABS.N) and other stores to Cerberus Capital Management LP in 2013, the people added.
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