Saturday, September 10, 2005

Everything on sale at ...

... Albertson's!

Albertson's (ABS) announced that it is looking for a buyer. News late this week indicated that a few private equity players are interested. This sent the stock soaring to around $25.

I had bought a few shares at $20.6 not too long ago - the yield of about 3% also made it attractive then. I did not expect private equity buyers to show interest. A bigger retailer like Kroger or even Safeway seem like more natural buyers.

Albertson's is unlikely to receive a large premium to its current price.

Safeway (SWY), with its ownership of prime real-estate all over California, is a perfect fit for private equity groups. I own some Safeway shares too, bought at a much lower price (~ $18.7). It is still attractive, at around $25 today, but be prepared to buy more on a pullback after its recent runup.


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