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Albertsons stock rises on bid talk

BOSTON — Albertsons Inc. stock rose Friday on trading volume more than triple its daily average, on a report that private-equity investors are lining up to bid on the supermarket chain.

Shares of Albertsons rose $1.81, or 7.8 percent, to close at $24.86 on the New York Stock Exchange.

Private-equity firms Kohlberg Kravis Roberts & Co., Apollo Advisors LP, Bain Capital LLC, Thomas H. Lee Partners and Carlyle Group are interested in buying the company, according to a report Friday on Web site.

The report didn't name its sources for the information. It also said bidding for the company could bring "more than $16 billion, including the assumption of $6 billion in long-term debt." First-round bids were due Sept. 5, and a transaction may be completed by the end of November.

Albertsons didn't immediately return a call seeking comment.

The Boise-based chain, which has 47 stores in Utah, last week said that it hired Goldman Sachs & Co. and Blackstone Group LP to seek strategic alternatives for the company.

A Bain Capital representative didn't have an immediate comment on the report. A Thomas H. Lee Partners representative said the firm declined comment on the report.

CIBC World Markets said in a research note Wednesday, after Albertsons' second-quarter earnings results, that "we believe Albertsons will be sold to private-equity players who can use the real estate to de-lever the purchase, then divest quickly the most saleable assets — Shaw's (supermarket chain) and the (Jewel-Osco) drugstores."

Analyst Perry Caicco said in a note, "Working through the remaining assets, there could be $38 (a share) of total value there." He rates Albertsons shares "sector-outperformer" with a price target of $30, based on the view that the private-equity bidding could go that high.

CIBC said it currently does and seeks to do business with companies covered in its research reports. It said its analysts are prohibited from trading in the shares of companies they follow for the firm.