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File photo by Tim Barber
Bi-Lo stores such as this one in Red Bank could be integrated into Food Lion's network if a federal judge approves a deal between the companies.
Food Lion wants to take a big bite out of the Chattanooga area grocery market.
Delhaize Group, the Belgian owner of Food Lion, has agreed to buy "a substantial majority" of Bi-Lo's assets for $425 million, officials said Monday.
Delhaize announced it has entered into a nonbinding letter-of-intent with the Mauldin, S.C.-based Bi-Lo as part of Bi-Lo's Chapter 11 bankruptcy proceedings.
Area Bi-Lo stores would be integrated into Food Lion's network if a federal judge approves the deal, according to Delhaize.
Bi-Lo had been exploring its restructuring options for some time, and the company's deadline to submit a plan for re-organization was Friday, said Lorrie Griffith, editor of the Shelby Report, a grocery industry publication.
"Whether it was a sale, selling part of the company or whatever it was, they have just been looking at all of their options," she said. "This was apparently the best deal that they were presented with."
Ms. Griffith said it is unclear if area Bi-Lo stores will begin operating under the Food Lion name or perhaps Bottom Dollar or Bloom -- other banners operated by Food Lion.
FOOD LION
* Stores - 1,300; 10 in Chattanooga area
* Locations - 11 Southeast and Mid-Atlantic states
* Workers - 74,000
* Owner - Delhaize Group
BI-LO
* Stores - 214; 29 in Chattanooga area
* Locations - 4 Southeast states
* Workers - 15,500
* Owner - Lone Star Funds
Source: Companies
Christy Phillips-Brown, a Food Lion spokeswoman, said both companies remain in discussions. She declined to comment on whether the deal includes all of Bi-Lo's 214 stores.
Rick Anicetti, executive vice president of Delhaize Group and president and chief executive of Food Lion, said it has great admiration for the associates and stores at Bi-Lo.
"We believe our markets and service philosophy are complementary, and we look forward to continuing our discussions with Bi-Lo," he said.
According to Reuters, the assets of Bi-Lo will be open to other bids in an auction and another buyer could top Delhaize's proposed price.
Michael Byars, Bi-Lo president and chief executive, said Bi-Lo will continue its attempt to maximize the value of its business and to return the highest and best recoveries to our creditors and constituencies.
"Consistent with its fiduciary duty, Bi-Lo remains focused on maximizing the value of the estate for the benefit of all Bi-Lo stake-holders," Mr. Byars said. "All options for Bi-Lo remain under consideration, and we believe it is important to carefully review our options and determine the most appropriate course of action in the context of the Chapter 11 process."
He said the company "intends to work constructively with all parties in order to effectuate a successful restructuring."
While a federal Bankruptcy Court judge first must approve the agreement, Delhaize officials said they intend to close on the deal with Bi-Lo shortly after getting a nonappealable sales order from the court.
Bi-Lo owner Lone Star Funds, a Dallas-based private equity firm that bought the grocer in 2004, filed voluntary petitions for bankruptcy relief on March 23. It said then that tight credit markets prevented it from refinancing a loan that was coming due.
Bi-Lo traces its Chattanooga area roots to Red Food Stores, which long operated in the area.
Over the past decade business after business has been bought using extreme leverage,followed shortly by withdrawing as much cash as possible,leaving a heavily in debt entity to try to survive.Either way,survive or not,the investment groups stuffed their pockets on the front end.It's the latest iteration of American capitalism and it's all legal.
It's been a few years after BI-LO runs off Winn Dixie from Chattanooga with it's wasteful and invasive marketing practices. As a result, BI-Lo is rewarded with bankruptcy for its' abuses.
As part of the Food Lion take over, they probably will have to keep the BI-LO employees. I wonder how high up the corporate latter Food Lion is supposed to take and is BI-LO really changing its' name to Food Lion?
I like Food Lion, I just hope this is not a cloaked merger where BI-LO is going to be in control.
One more thing. I shopped at both stores frugally using a calculator to keep withing my spending budget.
I normally buy items that the store automatically deducts costs with a bonus card. BI-LO is almost always inaccurate and charges me 5 dollars more no matter how accurate I keep the prices totaled. Food Lion is normally right on the digit, never going more than what the advertised price is.
BI-LO is has clearly deceived all the people they could for short term profit; consequently, losing in the long term.
I find it funny your comment of how they must keep bi-lo employees, bi-lo employees right now are sitting waiting to see if they will have a job within the next few weeks, months, etc. We are single parents, moms, dads, young adults, divorced parents, etc...we all have families to support, and I hope we do get to keep our jobs...so perhaps u have a stable job, we all thought we did too. So how about praying for the employees and their families. Im sure bi-lo didnt screw you, maybe you need to learn use of a calculator.
Since Publix entered the market, I have wondered if there were enough food dollars to go around. Hopefully, there won't be any Bi-Lo layoffs after they re-structure. The "food elephant" in the market place is, of course, Wal-Mart and they do, in my opinion, consistently have the lowest prices.
Unfortunatly jobs are going to be cut.My husband and I both know that we will be among the first to lose our jobs.. That is horrible for you to say things like that tax_payer. Thanks to bilo I finally got benifits for the first time in my life (now they will be gone) and a decent job that I could hold my head up proudly for. To top it all off we live in an area with no jobs and with all these closings I look for things to become very stressful. I will verbaly bash the companies CEO's and human resources for not telling us anything. That has become a regular practice since this started. Pretty darn bad when you get a crummy text message to tell you that you dont have a job anymore. ((REALY HAPPENED) I hate that my whole life will change because of this but I really do hope that the ones who have gotton their pockets greased will live a horrible and miserable life.
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