RICHMOND -
The speculation continues to simmer over the potential sale of Ukrop's.
Officially, the company dismissed reports last month that the 72-year-old retailer was on the market.
But CBS 6 confirmed through independent sources that Ukrop's management is actively seeking a buyer. Then on Tuesday, food magazine Supermarket News reported that a private equity firm had placed the highest bid for the chain and its 28 properties- surpassing grocer Harris Teeter.
"My understanding is, at this point, a private equity group has outbid the other suitors in the early round," said the article's author, Jon Springer. "They are now in negotiations with Ukrop's exclusively."
What would that mean for the short- and long-term prospects of Ukrop's in Richmond?
According to Eric Perkins, an attorney who specializes in business and private equity law, it might benefit Ukrop's shoppers more if the company accepts the current high offer.
"A private equity firm is far more likely to retain senior management and employees, and they're more likely to preserve the Ukrop's brand and company culture," explained Perkins.
However, at the end of the day private equity firms are still out to make a buck.
"Their focus is going to be on maximing the value of their investment, and then cashing out that investment within about three to seven years," concluded Perkins.
Nonetheless, the ability of any potential bidder to flip the company down the road will hinge heavily on the state of economic recovery.
Officially, the company dismissed reports last month that the 72-year-old retailer was on the market.
But CBS 6 confirmed through independent sources that Ukrop's management is actively seeking a buyer. Then on Tuesday, food magazine Supermarket News reported that a private equity firm had placed the highest bid for the chain and its 28 properties- surpassing grocer Harris Teeter.
"My understanding is, at this point, a private equity group has outbid the other suitors in the early round," said the article's author, Jon Springer. "They are now in negotiations with Ukrop's exclusively."
What would that mean for the short- and long-term prospects of Ukrop's in Richmond?
According to Eric Perkins, an attorney who specializes in business and private equity law, it might benefit Ukrop's shoppers more if the company accepts the current high offer.
"A private equity firm is far more likely to retain senior management and employees, and they're more likely to preserve the Ukrop's brand and company culture," explained Perkins.
However, at the end of the day private equity firms are still out to make a buck.
"Their focus is going to be on maximing the value of their investment, and then cashing out that investment within about three to seven years," concluded Perkins.
Nonetheless, the ability of any potential bidder to flip the company down the road will hinge heavily on the state of economic recovery.
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