Bi-Lo buys big with proposed Winn-Dixie merger
GREENVILLE, S.C. — Bi-Lo and Winn-Dixie Stores on Monday announced that the companies will merge to create an organization of approximately 690 grocery stores and 63,000 employees in eight states throughout the southeastern United States.
Under the terms of the definitive agreement, BI-LO will acquire all of the outstanding shares of Winn-Dixie stock in the merger. Winn-Dixie shareholders will receive $9.50 in cash per share of Winn-Dixie common stock, representing a premium of approximately 75% over the closing price of Winn-Dixie common stock on Dec. 16.
“With no overlap in our markets, the combined company will have a perfect geographic fit that will create a stronger platform from which to provide our customers great products at a great value, while continuing to offer exceptional service," stated BI-LO chairman Randall Onstead. BI-LO and Winn-Dixie do not currently expect any store closures as a result of the combination, the companies noted. "BI-LO and Winn-Dixie are both strong regional brands with similar heritages.”
“This transaction with BI-LO provides Winn-Dixie shareholders with a significant cash premium for their shares. We believe this transaction is in the best interests of our shareholders,” commented Peter Lynch, chairman, CEO and president of Winn-Dixie. “By combining BI-LO and Winn-Dixie, we anticipate building a company that is stronger than our individual businesses and creating opportunities for continued advancement through the cross-pollination of our people and the sharing of ideas across our organizations, all to the benefit of our guests, suppliers, team members and the neighborhoods that Winn-Dixie serves.”
The transaction is currently expected to close in the next 60 to 120 days, subject to the approval of Winn-Dixie shareholders and other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is not subject to any financing condition. Following the completion of the merger, Winn-Dixie will become a privately-held, wholly owned subsidiary of BI-LO and Winn-Dixie’s common stock will cease trading on the NASDAQ.
Until the merger is complete, both BI-LO and Winn-Dixie will continue to operate as separate companies.
Following completion of the merger, it is anticipated that the companies will continue to operate under the BI-LO and Winn-Dixie banners, the grocers stated.
The combined company’s executive management team structure and headquarters location will be decided as the companies move closer to finalizing the transaction; however, it is expected that the combined company will maintain a presence in both Greenville, S.C. and Jacksonville, Fla.
Green Monday online spending up 19% to $1.13 billion
RESTON, Va. — Data released Wednesday by ComScore showed that holiday season retail e-commerce spending for the first 42 days of the 2011 holiday season is up 15% year over year. Through “Green Monday,” Dec. 12, $26.8 billion has been spent online.
The most recent week (week ended Dec. 11) reached a record $6.1 billion in spending, in line with the season-to-date’s 15% growth rate, according to the report.
Green Monday, Dec. 12 — the second Monday in December when online spending has historically tended to peak — reached $1.13 billion in spending, a 19% increase over last year and ranking it as the third heaviest spending day of the season after Cyber Monday ($1.25 billion) and Monday, Dec. 5 ($1.17 billion).
“Green Monday kicks off what should be the heaviest week of the year for online shopping, where we could see several billion dollar spending days, punctuated by Free Shipping Day on Friday, Dec. 16,” ComScore chairman Gian Fulgoni said.
Wellness+ does well and then some, while so-so performance from Wellness stores
During the question-and-answer session of Rite Aid’s third-quarter earnings call, president and CEO John Standley responded to a question about the Wellness+ loyalty card program by saying, “We continue to try and evolve and grow the program. We’re obviously learning a lot as we go."
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Considering that Wellness+ predates the Wellness store format, it’s safe to say that the same is true for the new format, which Rite Aid introduced this summer and plans to have expanded to 300 stores by the end of fiscal 2012.
As Standley put it, some of the stores are “way up,” while others aren’t doing so well, and overall, the stores’ performance doesn’t seem to be where management would like it, though the company appears optimistic. While the Wellness stores have many innovative features, new merchandise, new ways of presenting merchandise and a welcoming, open store design, one of the deciding factors in how well they do on an individual basis seems to be the Wellness ambassadors, who could end up being key to the new format’s success in the long term.
By contrast, the Wellness+ loyalty card program has grown in a big way and contributed significantly to the chain’s growth, and true to form, members have proven to be the company’s most loyal customers. Offering new features, such as the new Bronze tier and “wellness rewards,” could help build further loyalty as customers realize incentives to keep going back to Rite Aid stores.