Prior to the long-planned Albertsons IPO on June 26, the retailer believed the stock offering could raise up to $1.3 billion, based on a target of selling 65.8 million shares at a price of $18 to $20 per share. Reality came in the form of 50 million shares sold at $16 apiece, for an $800 million IPO value.
Albertsons CEO Vivek Sankaran told CNBC that he was pleased about the IPO despite its not meeting expectations, blaming overall stock market volatility for the shortfall rather than the retailer’s financial health.
“It’s so hard to predict what’s happening in the market anymore,” said Sankaran. “It’s so different from the beginning of the week to the end of the week, but we are just proud that in this extremely difficult environment, in the middle of a pandemic, we were able to IPO the company.”
Albertsons, which operates more than 2,200 supermarkets in 34 states, benefited from the pantry stocking that marked the early weeks of the COVID-19 pandemic. For Q4 2019, which ended Feb. 29, 2020, the retailer reported same-store sales growth of 1.8%, its ninth consecutive quarter of same-store growth, and net income of $68 million.
The retailer and its private equity owner, Cerberus Capital Management, have been trying to take Albertsons public for five years, according to Reuters. Albertsons was reportedly interested in purchasing Whole Foods before it was bought by Amazon in June 2017. In August 2018, Albertsons and Rite Aid called off a $24 billion merger amid investor criticism about combining two companies with heavy debt burdens.