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Empire Co., the family holding company that owns more than two-thirds of Sobeys Inc., Canada’s second largest supermarket chain, plans to take the company private by purchasing the 28 percent that it does not own. The cost of the purchase is the equivalent of $980 million (US).

Bloomberg reports that “Sobeys is going private after posting its first drop in net income in five quarters last month. The company has lowered prices to fend off Wal-Mart Stores Inc., which opened seven Canadian supercenters last year, and its stock was down 7.7 percent this year through yesterday.” The story goes on, “Sobeys went public in 1998 after it agreed to buy the Oshawa Group, allowing it to expand beyond eastern Canada and triple its revenue.”

The acquisition is expected to close by mid-June.
KC's View:
It sounds like this is the right move for Sobeys, which is picking the right moment to buy back stock and now can compete with Wal-Mart and other chains without worrying about shareholders and the stock price.