Private grocery store chain BI-LO LLC has agreed to buy Winn-Dixie (WINN) for $560 million, the company announced on Monday. BI-LO said it will pay $9.50 per share for Winn-Dixie, a 75% premium to its Friday closing price (no exactly living up to its “Buy-Low” name, har-har).
The market appears to be expressing slight skepticism about the deal, as shares are currently up about 71% to $9.30.
BI-LO, which is majority owned by private equity firm Lone Star Funds, operates 207 supermarkets in Southern States like Georgia, and the combined company would have about 650 stores. In a statement, BI-LO Chairman Randall Onstead emphasized that there is “no overlap in our markets” where the two companies might have to compete. Currently, BI-LO doesn’t expect to close any locations.
Before today, WINN stock had fallen 24% on the year.
One curious issue: on Friday, nearly 4.5 million shares of Winn-Dixie were traded; on an average day, the stock trades hands just under 1 million times. It was the second highest volume this year. The stock was down on the day Friday, but clearly some people were buying. Could any buyers have had an inkling of what was about to happen?
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