Albertsons sells shares in IPO for a disappointing $16

by   CIJ iDesk I
2020-06-26   15:44

While one has to admire the courage of carrying through on a planned IPO in the middle of a pandemic, it's hardly surprising that the end result fell short of initial expectations. Albersons went ahead with an $800m initial public offering on the same day that multiple states across the country published record numbers for new cases of Covid-19. Having owned the company since before the last crisis, its private equity owner Cerberus was anxious to finally cash in on the company it's been nurturing for over a decade. Perhaps counter-intuitively, the pandemic actually helped Albertsons' cause as consumers descended upon it and other supermarket operators across the country for a bout of panic buying. Sales for the retailer jumped 34 percent for March and April. And yet the IPO just completed at $16 per share fell short of its $18- $20 expectation demonstrated that not everyone is convinced. The price suggests a valuation of roughly $9.3bn, which doesn't take into account the $8.5bn it owed as of the end of February. Albertsons also ended up selling just 50 million shares instead of the expected 65.8 million. There are reports that Cerberus nearly walked away on the deal, which would have been a repeat performance of the investor's stubborn streak first displayed when a 2015 IPO for Albertsons fell apart.