Price Chopper makes offer on P&C stores - Bizjournals

Price Chopper makes $54M bid for 22 P&C stores

The Golub Corp. wants to extend its reach in central and northern New York by purchasing 22 P&C supermarkets for $54 million and converting them into Price Chopper stores.

“It would be a significant piece of growth for us and something we would covet,” said Neil Golub, president and CEO of the Rotterdam-based chain. “It’s a great opportunity, and we can do it in a very economical way.”

The small- to large-size stores are scattered throughout upstate, including Syracuse, Gouverneur, Pulaski, Baldwinsville, Canastota, Cazenovia, Skaneateles, Penn Yan, and West Sherrill.

Three of the 22 stores are in New Hampshire, Vermont and Pennsylvania.

The Penn Traffic Co. supports the latest offer and is asking a bankruptcy court judge to approve the deal.

If approved, the deal would increase Golub’s store count to 141 in six states and significantly boost the payroll beyond the 24,000-plus employed today.

A typical Price Chopper supermarket has 100 to 150 workers. Buying 22 stores could conceivably add 2,200 to 3,300 employees.

The purchase would also ramp up the competition between Golub and the Rochester-based Wegmans chain. Both companies already compete in the Syracuse area and in Scranton and Wilkes-Barre, Pa.

Retail consultant Bill Bishop said growth is essential in the industry today because of the aggressive competition from big-box retailers and discount supermarkets.

“In some markets around the U.S. it is beginning to appear that there’s room basically for two major players and some splinter players,” said Bishop, president of Willard Bishop in suburban Chicago.

Golub’s purchase offer was outlined in court papers filed in connection with the Chapter 11 bankruptcy sought by The Penn Traffic Co., the Syracuse-based parent company of P&C, Quality Markets and Bi-Low grocery stores.

The offer replaces an earlier one by Golub that was limited to four of the stores at a total cost of $12.3 million. Golub said the two companies were pursuing that deal prior to the bankruptcy filing in November.

Objections to the sale, which could be made by competitors, must be filed by Jan. 4.

Golub isn’t aware of another bidder interested in the 22 stores that the company is eyeing, but said Morgan Stanley is representing Buffalo-based Tops in its effort to buy other stores in the Penn Traffic chain.

Penn Traffic filed for bankruptcy protection last month, as the company sought to keep its stores running while it searches for a buyer or buyers for its 79 stores in western, central and northern New York and surrounding states.

The petition was filed in U.S. Bankruptcy Court in Delaware.

Golub bought P&C stores last year in Oswego, Lebanon, N.H., and Colchester, Vt.

“We’ve had experience dealing with them on some other deals,” Golub said. “It’s no secret P&C has had financial trouble for years. We examined and looked at [the 22 stores] as an opportunity. We knew they’d eventually burn through cash.”

All 22 stores would be remodeled to include seafood departments, chicken rotisseries and other take-out services that customers have come to expect in supermarkets.

“They’re all in pretty decent shape,” Golub said. “That was a big plus for us. Some will require a little more work than others.”