business news in context, analysis with attitude

The Milwaukee Journal Sentinel reports on the likely possibilities now that Roundy’s has announced that it is up for sale.

Owned by private equity firm Willis Stein & Partners, many analysts think it probable that another, similar firm will acquire Roundy’s, which would leave its management and growth strategy intact.

The other possibility is that a retailer could step in, with Safeway and Kroger mentioned as the most likely possibilities –especially since management at both companies has said that they are interested in making acquisitions.

However, there is some skepticism about Kroger, with analysts saying that the company is more interested in smaller companies that can be obtained for a bargain price; Roundy’s market dominance in the Milwaukee area means that it probably will carry a premium price.

Safeway seems more possible, though there appears to be some question among analysts about whether it would want to enter a market where it does not have stores. Still, Milwaukee isn’t that far from Chicago – where Safeway as the Dominicks chain – and Roundy’s has announced that it is going to enter the Windy City with new stores.
KC's View:
Without passing judgment on it either way, we would expect that a move by Safeway would raise howls of protest from folks not thrilled with how Dominicks has been run over the years. And the irony would be considerable, since it has long been rumored that Roundy’s CEO Robert Mariano was interested in acquiring Dominicks.