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     Kubang Celebrity Bewarse Username: Kubang Post Number: 39730 Registered: 09-2011 Posted From: 161.141.1.1 Rating: N/A |
In comparison… Kroger (NYSE: KR), the country’s largest retail grocery chain, currently trades at 3.1-times book value. And Whole Foods Market was trading for nearly four-times book value when it was acquired by Amazon. As I said, as a potential take-over target, Supervalu’s stock may be worth more “dead” than “alive.” If a prominent grocery chain, like Kroger, was willing to acquire Supervalu for a 25% premium to today’s stock price – roughly the premium that Amazon paid for Whole Foods’ stock – shares of Supervalu could go for more than $22.50. If an acquirer was willing to pay 2-times book value – still a steal, I think – shares of Supervalu could go for almost $27. And at Whole Foods’ four-times-book valuation, shares of Supervalu could be worth as much as $50! Of course, there’s no way to know if a deal like this will go through any time in the near future. But with Blackwells already turning up the heat on Supervalu’s board, heading into the company’s summer shareholder meeting, now’s a good time to take a shot at an M&A-driven “windfall” profit. Even if no one steps in to acquire Supervalu at an attractive multiple, the stock still stands to make good gains as investors’ sentiment improves. The stock is already up more than 25% since February, when Blackwells began outlining its strategy for unlocking shareholder value. That’s a strong vote of confidence for the activist’s turnaround plan. Ignorance is bliss |