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    Five Bidders Seek to Win Albertson's

    Winner of grocery chain auction predicted to dish out more than $10 billion.

    NEW YORK -- Five bidders, including the country's largest supermarket chain, Kroger, have emerged as suitors for the Albertson's Inc. grocery chain, people involved in the auction told the The New York Times .

    At least three bidders are consortiums led by investment groups, these people said, including one led by Kohlberg Kravis Roberts, one by Thomas H. Lee Partners and one by the Yucaipa Companies, which earlier this year agreed to pay about $150 million for a stake in the Pathmark supermarket chain, The Times reported.

    The bids for Albertson's, which put itself up for sale in September, are all in the high $20's a share, which would value the deal at more than $10 billion. Any offer would be expected to include about $6 billion in debt, according to The Times .

    But, the sources said said in the report that the bids are preliminary and any deal could be weeks away.

    The five bids are for the entire Albertson's chain, which is based in Boise, Idaho.

    Separately, several drugstore chains -- including Walgreens, Rite-Aid and CVS -- have lined up to buy Albertson's drug operations, either from the company or the new owner, reported The Times .

    The acquisition of Albertson's 2,300 stores would give Kroger a strong presence in the Northeast, a region where the company does not have a significant presence.

    The bid comes as traditional supermarkets are struggling to regain market share in the face of discount retailers like Wal-Mart and Costco and the organic and specialty stores like Whole Foods and Wild Oats, according to the report.

    Grocery sales at Wal-Mart are now far larger than that of any supermarket, jumping to $109 billion in 2004 from $82 billion in 2002, according to Retail Forward, a research firm in Columbus, Ohio. Sales at Kroger were $56 billion in 2004.

    The combination of Kroger and Albertson's would have sales almost as large as that of Wal-Mart's grocery business, reported The Times . Kroger, which is based in Cincinnati, operates 2,500 stores under names like Fred Meyer, Ralphs, Smith's and King Soopers.

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