Frontrunner for U.S. Foodservice Revealed

Clayton Dubilier & Rice, an American private equity company, is considered by the Financial Times to be the frontrunner in bidding for the second largest American foodservice distributorship that is owned by Royal Ahold, Zaandam, the Netherlands. Another potential buyer is the South African investment firm Bidvest.

However, all parties concur that talks are still at an early stage.

New reports quoted analysts' estimates that proceeds from the sale at some 4.5 billion euros (about $5.7 billion according to today's exchange rate), which Royal Ahold will likely be used to reduce debts, modernize its American supermarkets and a share buyback.

According to the Financial Times, discussions with the American group surfaced as interest in all or part of Ahold from Blackstone and Kohlberg Kravis Roberts was thought to have diminished.

The British business newspapers reported that two people close to the situation confirmed Clayton Dubilier & Rice's interest but noted that talks were "early" and could yet break down. However, the publication indicated, Clayton Dubilier & Rice is well positioned as it is already familiar with U.S. Foodservice. The Financial Times reported that in 2001, it sold Alliant to Ahold in a $1.45 billion deal. Clayton Dubilier & Rice gained more than $1 billion on Alliant, one of its best ever investments, the newspaper said.

On Monday, Ahold said it would reveal on Monday, Nov. 6, the findings of a review of its retail operations that is intended to improve profits and sales, which will seal the fate of U.S. Foodservice.


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