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Winn-Dixie Operator Southeastern Grocers Pulls IPO: Source

NEW YORK (Reuters) - Southeastern Grocers Inc, the operator of U.S. supermarket chains Winn-Dixie and Harveys, decided on Thursday to cancel its initial public offering due to a lack of demand at the price range the company was targeting, a person familiar with the matter said.

It is the second time Southeastern Grocers has pulled a planned IPO after it made the same decision in 2014.

Shareholders in Jacksonville, Florida-based Southeastern Grocers had aimed to sell 8.9 million shares on Thursday at a target price range of $14-$16 per share, which would have earned them up to $142.4 million. Southeastern would not have received proceeds from the IPO.

Southeastern Grocers declined to comment. The source requested anonymity as the decision was not yet public.

Southeastern Grocers was formed in 2012 by private equity firm Lone Star Funds to house the Winn-Dixie and BI-LO grocery store brands. The company filed for bankruptcy in 2018, hit by competition from bigger retailers.

Southeastern Grocers and many other grocery corporations have seen a surge in demand from customers buying household items while under COVID-19 restrictions. The company said it generated $7.4 billion of net sales for the 40 weeks ended in September last year, up 16.6% from the previous year. Its net income rose to $235 million from a net loss of $93.7 million.

Nevertheless, grocery chains have faced a lukewarm reception from investors.

Rival U.S. supermarket operator Albertsons Companies Inc in June completed a long-awaited IPO but sold fewer shares than planned and at a price that was below its target range.

Shares in Kroger Co are flat compared to their price six months ago compared to a 17.7% rise in the benchmark S&P 500 Index over the same period.

Southeastern Grocers operates 419 stores across Florida, Georgia, Alabama, Louisiana and Mississippi. Its other brands include Harveys and Fresco y Más.

Reporting by Joshua Franklin in Miami and Chibuike Oguh in New York; Editing by Leslie Adler and David Gregorio

Source: Reuters

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