Last month, Lone Star Funds announced that BI-LO would no longer own Bruno's Supermarkets and the latter would move its headquarters back to its original home of Birmingham, Alabama.
Yesterday, Lone Star made another announcement concerning BI-LO and this time it was to make public its decision to sell the 230-store chain.
When Lone Star originally announced it was splitting BI-LO and Bruno's off from one another, Len Allen, president of the private equity firm, said, "This reorganization will allow both supermarket chains to build on their strong brand reputations. Both have strong store management teams, strategic store locations in one of the country's fastest growing regions and both enjoy a long tradition of customer and community service. As two independent supermarket chains, resources can be better focused to serve the needs of their respective customers."
Evidently, Mr. Allen was not referring to Lone Star's resources when he made that statement. The private equity firm has hired Merrill Lynch & Company and William Blair & Company to advise it on the sale of BI-LO.
Discussion Questions: How much stronger or weaker is BI-LO today than in 2004 when Lone Star acquired the chain from Ahold? What will Lone Star Funds' decision to sell BI-LO likely mean for that chain? What about Bruno's?