David Dillon, chairman and ceo of the Kroger Co. (Cincinnati), has sent a memo reassuring company employees that the nation’s largest supermarket chain is not looking to be acquired.
The Wall Street Journal, citing unidentified sources, had reported last week that private-equity firms might be eyeing the company as a buyout target and that it would soon begin exploring a leveraged buyout with the help of investment bank Goldman Sachs.
“I want you to know neither management nor our board of directors has any interest in pursuing a leveraged buyout transaction,” Dillon told employees. “Our focus is on the execution of our business strategy, which is to serve our customers, and in that way to continue to grow Kroger as an independent public company and create value for our shareholders.”
At its current stock price, Kroger would be worth approximately $20 billion.
“With the ready availability of significant capital in private equity funds and Kroger's attractiveness as a franchise, rumors and speculation are not surprising,” Dillon’s memo said. “Unfortunately, the kind of speculation contained in the article can be disruptive to our associates and to the conduct of our business.”