(Reuters) – Albertsons Cos Inc ACI.N saw its shares drop in its debut on the New York Stock Exchange on Friday, a day after the US supermarket operator cut its initial public offering to $ 800 million.
FILE PHOTO: Customers walk out of an Albertsons grocery store with their purchases in Burbank, California, USA, on July 17, 2012. REUTERS / Fred Prouser
Shares of the Boise, Idaho-based company ended up trading 3% below its IPO price of $ 16 a share, at around $ 15.51.
It closed a disappointing stock market debut for Albertsons and its private equity owner, Cerberus Capital Management LP, who has been an investor in the company for 14 years and has been trying to go public for five years.
Albertsons on Thursday sold 50 million shares in the IPO at $ 16 each, losing its target of 65.8 million and below a target price of $ 18- $ 20.
Senior Cerberus executives held talks Thursday night with Jamie Dimon, CEO of JPMorgan Chase & Co (JPM.N), one of Albertsons’ IPO advisers, who informed them that $ 16 a share was as good a deal as they would likely get in today’s environment, according to a person familiar with the matter.
JPMorgan declined to comment. Cerberus did not immediately respond to a request for comment.
The Albertsons listing ended the IPO market’s longest streak of a deal that has not been priced below a company’s target range since 2009, according to Renaissance Capital, which tracks IPOs.
“Things are so volatile in this market,” Albertsons chief executive Vivek Sankaran said in an interview.
“Our perspective was that we are in the long term,” added Sankaran.
The COVID-19 pandemic boosted Albertsons’ revenue as consumers stocked up on food during the blockades. However, rival supermarket chain Kroger Co (KR.N) warned that the increase in demand for essential goods that he saw during the coronavirus outbreak was fading.
Reports by C Nivedita and Joshua Franklin; Shinjini Ganguli and Tom Brown Edition