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Best Buy, Supervalu Face Challenges in Sale Efforts

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Both retailers' efforts to strike deals with private equity firms are being followed closely by the retail real estate community as the chains are in dire need of overhals in order to stay in business. It seems, however, that these days it's not all that easy to sell a struggling business.

The New York Post reports that Best Buy founder Richard Schulze has still not secured firm committments for investment capital from companies he'd like to partner with on a Best Buy acquisition. According to the Post:

While sources say Best Buy’s board could give Schulze another extension, the delays have raised worries that Schulze is facing intractable execs from private-equity shops who are demanding control of the retailer as a condition for signing onto a deal.

Meanwhile, in supermarket land, Cerberus Capital Management hasn't been able to secure the necessary capital to acquire the struggling Supervalu chain, leading to stalled buyout negotiations, according to Bloomberg News.

Potential lenders are balking because they're concerned over how the Eden Prairie-based chain will manage the increased debt load as revenue shrinks, said the sources, who asked not to be named because the process is private. Lenders also are pressing Cerberus to put more money into the deal than the firm is willing to, another person said.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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