Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By



Executive Summary

KROGER CONSIDERING SUPERx/HOOK LEVERAGED BUYOUT as one option for divesting its drugstore business. In a Sept. 30 press release, the Cincinnati-based supermarket chain said it is "developing plans to sell its retail drug business through a series of private transaction," and that one of the alternatives involved is "the formation of a private company that would include the majority of the current assets of SupeRx Drug Stores and Hook Drug." Kroger's announcement indicates a narrowing of options since the company decided to "reposition" its drugstore operations two months ago ("The Pink Sheet" July 28, p. 13). At that time Kroger said it was also considering a shareholder spinoff of its retail drug business via a new public offering. Kroger currently operates 891 SupeRx and Hook stores located in the Midwest, Northeast, Southeast and Southwest. In its most recent 10K filing with the Securities & Exchange Commission, Kroger reported that 213 SupeRx stores are located adjacent to Kroger Supermarkets. One possibility is that the 330-store Hook chain might be sold separately. When the Indianapolis-based drug chain was acquired in 1985 for $160 mil., Kroger already had a retail drug business in the Midwest. Hook could be sold as a separate entity, and SupeRx would still retain its presence in that region of the country. While SupeRx and Hook, combined, make Kroger one of the nation's largest drug chains, their combined operations accounted for only 7% of the company's total 1985 revenues. Kroger reported sales of $17.1 bil., of which $1.2 bil. came from the drugstore division. The remainder came from the company's 1,360 Kroger/Dillon supermarkets and convenience stores. In addition, Kroger has recently made a move into the food/drug combo area, which it intends to pursue. These operations, located in 380 supermarkets, would be unaffected by the sale of the drugstore business. "We believe that a repositioning of the drugstores will enable the stand-alone portion of the company to better pursue its market niche as a healthcare/convenience retailer, while Kroger concentrates on the development and refinement of drug merchandising within the combination store setting," the company stated last July. Kroger indicated that should the company decide in favor of a leveraged buyout, current management would be invited to participate. The drugstore division is headed by Gerald Wolken, a corporate VP who serves as president of SupeRx. Kroger said it is "hopeful" the transactions will be completed "shortly." Proceeds will be used to reduce debt, purchase outstanding shares of common stock and for other corporate purposes, the release noted.

You may also be interested in...

Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth




Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts