NEW YORK (Reuters) – Southeastern Grocers Inc, the operator of U.S. supermarket chains Winn-Dixie and Harveys, decided on Thursday to cancel its initial public offering due to a lack of demand at the price range the company was targeting, a person familiar with the matter said.
Jacksonville, Florida-based Southeastern Grocers had aimed to sell 8.9 million shares on Thursday at a target price range of $14-$16 per share, raising up to $142.4 million for the company.
Southeastern Grocers did not immediately respond to a request for comment. The source requested anonymity as the decision was not yet public.
It is the second time Southeastern Grocers has pulled a planned IPO after it made the same decision in 2014.
Southeastern Grocers was formed in 2012 by private equity firm Lone Star Funds to house the Winn-Dixie and BI-LO grocery store brands. The company filed for bankruptcy in 2018, hit by competition from bigger retailers.
Southeastern Grocers and many other grocery corporations have seen a surge in demand from customers buying household items while under COVID-19 restrictions. The company said it generated $7.4 billion of net sales for the 40 weeks ended in September last year, up 16.6% from the previous year. Its net income rose to $235 million from a net loss of $93.7 million.
Nevertheless, grocery chains have faced a lukewarm reception from investors.
Rival U.S. supermarket operator Albertsons Companies Inc in June completed a long-awaited IPO but sold fewer shares than planned and at a price that was below its target range.
Shares in Kroger Co are flat compared to their price six months ago compared to a 17.7% rise in the benchmark S&P 500 Index over the same period.
Southeastern Grocers operates 419 stores across Florida, Georgia, Alabama, Louisiana and Mississippi. Its other brands include Harveys and Fresco y Más.
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