Dive Brief:
- CNBC sources say that AB Acquisition, the holding company that operates Safeway, has brought on additional bankers who could be working on an initial public offering for Safeway later this year, an IPO that could raise more than $500 million.
- This would be the third IPO for Safeway, which merged with Albertson's earlier this year.
- However, some experts don't believe these IPO rumors are true.
Dive Insight:
One of the main arguments against the IPO rumors is that the internal merger itself is not entirely complete, and "go-to-market strategies are still very different," so a merger at this time may be premature, one Wall Street analyst told Supermarket News.
Safeway could have other reasons for a planned IPO despite being so soon after its merger with Albertsons. According to Kelly Tackett, director of Planet Retail, "The proposed IPO could be more about the owners trying to take advantage of favorable market conditions and profit-taking than an indication of where the two supermarket operators are in the execution of their joint strategic plan," Progressive Grocer reported.