Jewel-Osco says it will keep the 19 remaining Strack & Van Til and Town & Country stores open and retain most of the employees if its bid to buy the Highland-based supermarket chain out of bankruptcy court is successful.
“We are excited to have the opportunity to grow the Jewel-Osco brand in the Midwest and welcome the Strack & Van Til team at those 19 stores to our Jewel-Osco family,” said Doug Cygan, Jewel-Osco division president. “Our two companies share a rich history of serving customers in the Midwest, as well as core beliefs in working hard to serve customers and deliver value every day on the finest quality fresh foods and local products.”
Jewel announced Monday it planned to buy Strack & Van Til stores at 9632 Cline Ave. in Highland, 2800 Calumet Ave. in Valparaiso, 2168 W. U.S. 30 in Valparaiso, 12 Ridge Road in Munster, 200 W. Franciscan Drive in Crown Point, 10851 Broadway in Crown Point, 9825 Wicker Ave. in St. John, 2080 E. Commercial Ave. in Lowell, 1515 U.S. 41 in Schererville, 1600 Pioneer Trail in Chesterton, 9605 Lincoln Plaza in Cedar Lake, 861 S. College Ave. in Rensselaer, 7760 E. Ridge Road in Hobart, 999 W. Old Ridge Road in Hobart, 1836 Calumet Ave. in Whiting, 115 Sibley St. in Hammond, and 4725 Indianapolis Blvd. in East Chicago.
It's also acquiring Town & Country Markets at 1605 Calumet Ave. in Valparaiso and 6046 Central Ave. in Portage.
"The 19 stores will be sold as going concerns," Central Grocers said in a news release. "Jewel-Osco has agreed to interview and extend offers of employment to substantially all of the employees of the stores that are part of the transaction."
Jewel-Osco suggested in a news release it would rebrand the Strack & Van Til stores as Jewel-Osco, describing the acquisition as an "opportunity to grow the Jewel-Osco brand in the Midwest," but a company spokeswoman refused to answer any questions.
Central Grocers said in a news release it was still trying to find a buyer for Ultra Foods stores in Highland, Merrillville on Broadway and Kankakee, Illinois.
Jewel-Osco has entered into an agreement to buy 19 Strack & Van Til and Town & Country Markets from beleaguered Joliet-based Central Grocers, which filed for bankruptcy after prompted by creditors and which is going out of business. The century-old cooperative owned 80 percent of Strack & Van Til, which accounted for roughly half of its $2 billion-a-year business.
Central Grocers picked Jewel as a "stalking horse bidder" in a bankruptcy court-supervised sale, which is when the seller negotiates with a buyer before the auction to ensure a fair price. Another bidder could come in and offer more money by a June 21 deadline. If any other suitors come forward, Jewel could back offer or enter into a bidding war that would raise the price.
Jewel is looking at buying the Strack & Van Til stores for $100 million, or $70 million for the 19 stores and an estimated $30 million for the inventory, according to a filing in bankruptcy court. Central Grocers' attorneys told the judge it entertained six offers, including some that would have included its 930,000-square-feet warehouse in Joliet, and that Jewel had the best bid.
"Central Grocers is continuing to evaluate proposals to acquire its state-of-the-art, 1,000,000-square-foot distribution center in Joliet, Ill., and its six additional Raceway real estate assets as it winds down its wholesale distribution operations," Central Grocers said in a news release. The three Ultra stores not included in the transaction are currently open and operating. The Company is continuing to pursue a sale of those assets. Any such asset sales will be conducted through a process authorized by the Bankruptcy Court."
A public auction will start on June 2. A hearing to approve the sale will take place on June 23 if no other bids come through, or on July 10 if Central Grocers receives other qualified bids.
Jewel-Osco said it does not expect to close any store locations as a result of the transaction, but already operates stores close to some of the Strack & Van Til stores, including in Munster and Chesterton.