Supervalu explores possible sale

The announcement by Supervalu Inc., the country's third largest supermarket chain, that it might offer itself up for sale sent stocks tumbling Thursday to new lows.

Shares fell $2.60, or 49 percent, to $2.69.

The Minnesota-based company owns St. Louis-based grocery store chains Shop ‘n Save and Save-A-Lot, as well as Albertsons, Jewel-Osco and others.

Supervalu announced yesterday that it has initiated a review of "strategic alternatives to create value for the company’s shareholders" and has hired Goldman Sachs and Greenhill & Co. as financial advisors to explore a sale of part or all of the company.

The company said net income fell 45 percent in the first quarter.

Supervalu also said that it would report Save-A-Lot as a separate segment in its earnings statements -- a sign, some analysts said, that it seemed poised to sell off the chain, which is its largest.

In the St. Louis area, Supervalu employs more than 3,600 people.

Supervalu's non-executive chairman, Wayne Sales, is overseeing the review process.

"There can be no assurance that such a review will result in any transaction or any change in the company’s overall structure or its business model," the company said in a statement.

Company executives said Supervalu plans to aggressively cut prices to gain some ground. But some analysts believe that it will be difficult to recover given the speed of its slide, calling the company's future "highly uncertain."

Shares of other large supermaket chains also slipped Thursday as news spread of Supervalu's plans to cut prices. Safeway Inc. fell nearly 10 percent, while Kroger fell 3.6 percent.