US grocer Safeway has been sued by private equity investor Yucaipa Cos., which claims it was unfairly excluded for bidding on Safeway’s 113 Dominick’s stores.
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Safeway is selling the Chicago-based Dominick’s unit, and it is rumoured that Super Valu is the likely buyer. However, Yucaipa claims its bid, at US$350m, was higher and as such should take precedence, reports the Contra Costa Times.
Yucaipa yesterday [Tuesday] filed a 17-page complaint in the Los Angeles Superior Court, claiming that Safeway refused to consider its bid, despite the fact that it had required Yucaipa to sign a contract to enter the bidding. The lawsuit refers to a conversation during which a Safeway board member allegedly said the company would sell to “anyone but Yucaipa”.
Yucaipa bought Dominick’s in 1995 for $693m before selling it on to Safeway three years later for $1.9bn.
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