By Jim Davis
The Herald Business Journal
Haggen Food & Pharmacy received four offers to buy at least some of its remaining stores in Washington and Oregon but only considered the Albertsons bid, according to court documents filed earlier this month.
The $106 million offer is to be reviewed at a hearing Tuesday in U.S. Bankruptcy Court in Delaware.
Haggen last year bought 146 stores across the West during the mega-merger between Albertsons and Safeway. The purchase propelled the Bellingham-based company from just 18 stores with fewer than 2,000 employees to 164 with more than 10,000.
The deal proved too much for Haggen, which filed for bankruptcy just months later. The chain closed or sold dozens of stores.
By mid-November, Haggen turned its attention to selling its core profitable stores in the Northwest, according to court documents filed earlier this month.
With the assistance of investment bank Sagent Advisors, Haggen contacted 69 grocery store operators, 21 of which were granted access to confidential electronic data about Haggen’s operations.
Ten of those operators then expressed interest purchasing at least some of these stores.
Haggen, Sagent Advisors and financial firm Alvarez & Marshal North America negotiated with those operators and received four bids for the core stores.
Of those, only the Albertsons made what was considered a qualifying bid. Haggen, which is owned by Comvest Partners of Florida, was given leeway to determine qualifying bidders and the baseline bid, according to court papers filed last November.
Haggen and Sagent Advisors continued negotiations with the four grocery operators while hearings for an auction of the stores was postponed several weeks.
In the end, all four operators upped their offers for the stores, but Haggen determined that Albertsons submitted “the highest or otherwise best bid.”
Now Albertsons and Haggen need the bankruptcy court to approve the deal.
On Friday, United Food and Commercial Workers International Union came out with a statement in support of Albertsons buying the remaining Haggen stores.
“Throughout every single day of this difficult bankruptcy process, UFCW members have displayed complete commitment to their jobs, their coworkers, their customers and our union family. UFCW members are truly the heart of these stores and they are the key to making them successful. With that in mind, we welcome the proposed sale of 29 Haggen stores in the Northwest to Albertsons because it rightfully ensures that our hardworking members will keep their jobs and continue to serve their communities and customers with pride,” according to the statement.
The union notes that Albertsons has agreed to take on the Haggen’s existing labor agreements has with its union workers under the deal. Store employees will assume seniority, wages, sick leave and vacation days.
If the companies get approval, Albertsons would take control of 29 of the remaining 32 stores. Three stores — one in Puyallup, another in Port Angeles and the third in Oregon City, Oregon — would be shut down.
Albertsons has announced that it would run 14 stores under the Haggen brand name — and keep a corporate office in Bellingham — and convert 15 stores to Albertsons.
The core stores in Snohomish and Island counties that Albertons would purchase under the deal are at 17520 Highway 9 SE, Snohomish; 1301 Ave. D, Snohomish; 26603 72nd Ave. NW, Stanwood; 8915 Market Place NE, Lake Stevens; 3711 88th St. NE, Marysville; and 31565 Highway 20, No. 1, Oak Harbor.