Winn-Dixie has struck a mega deal to sell its stake in Bahamas Supermarkets Ltd for $50 million and said it would use the proceeds to fund its remodelling program.
In a press statement from the company on Thursday, it was revealed that BK Foods Limited would purchase 78 per cent of the company’s interests in Bahamas Supermarkets Ltd, which includes 9 stores under the City Markets label and 3 under the Winn-Dixie label. The deal, which has also been described as complex, stipulates that the remaining 22 per cent of the company would continue to be publicly traded. The agreement also provides an opportunity for the submission of higher or better offers through an auction to be held at a later date.
In a company news release, Peter Lynch, President and CEO of Winn-Dixie said the company’s decision to sell was influenced by the company’s Chapter 11 filing and decision to focus on its core market in the U.S.
“We have concluded that a sale of our Bahamian operation is in the company’s best interests as we continue to sharpen our focus on successfully implementing our business plan and preparing to emerge from Chapter 11,” said Mr Lynch.
“Although the twelve stores in The Bahamas are profitable, they are not a core business for us. The additional liquidity generated from this sale will help Winn-Dixie support the remodelling of existing stores and development of new stores in our core U.S. markets. We are pleased that a local Bahamian company recognises the value of the Bahamian stores and the associates working in them,” Mr Lynch added.
Once the sale is finalised, which is determined by approval by a U.S. court, as well as an auction to be held at a later date, it is reported that the stores will remain open and that no jobs are expected to become redundant.
Further, Winn-Dixie will provide “transition services” which would ensure a smooth hand-over to the Bahamian owned BK Foods. The Jacksonville Business Journal also reported that Winn-Dixie has agreed to a Non-Compete Agreement in The Bahamas for at least two years, and would remove its trademark from all of the Bahamas stores within six months of the completion of the sale.
Director of BK Foods Ltd Jerome Fitzgerald was rumoured to be interested in acquiring Winn-Dixie’s stake in Bahamas Supermarkets for some time.
Now that those rumours have been confirmed Mr Fitzgerald said he is happy to see a major retail enterprise under Bahamian ownership.
“My partners and I are pleased to have been able to successfully conclude this phase of the transaction. Bahamas Supermarkets Limited has had a long history of success and profitability, and our group fully expects that success to continue the same management team overseeing day-to-day operations at the company and the same associates in the stores,” said Mr Fitzgerald.
“We believe this is a good opportunity that puts the retail food business in The Bahamas completely in the hands of Bahamians,” Ms Fitzgerald added.
Once this deal has been finalised, the 538 stores would remain under the Winn-Dixie food retail chain, including locations in Florida, Alabama, Louisiana, Georgia and Mississippi.
Mark Finlayson, another of BK Food’s Directors, said it is the intention of the new management to continue the successful operation of the food chain.
“We are excited about this chapter in the retail food market and look forward to continuing the excellent tradition Winn-Dixie is leaving here in The Bahamas,” said Mr Finlayson.
By: BARRY WILLIAMS, The Nassau Guardian
