MOUNT KISCO, N.Y. -- Stop & Shop has emerged as a bidder for A&P's Mount Kisco store, which is in connection to the fellow supermarket chain's Chapter 11 federal bankruptcy court filing.
The site is part of a 25-store bid package that A&P is seeking to unload to Stop & Shop, which is a subsidiary of Dutch food-service company Ahold.
Stop & Shop is making a stalking horse bid, which means it is the default acquirer unless a competing bidder prevails at an auction. Acme Markets and Key Food have made their own stalking horse bids for packages comprising the remainder of A&P's 120 stores that it plans to sell. A&P has 176 stores with uncertain fates, although it intends to sell them as well.
A&P's auction timeline includes a Sept. 11 deadline for bidders to file binding offers. Bidders who meet certain criteria will earn "qualified" bid status, making them eligible to go forward with the auction, according to the bankruptcy filing. There is a Sept. 18 deadline to publish qualified bidders. If there are competing bidders, auctions will be held on Sept. 24 to 25, with a hearing to follow on Oct. 1. If no qualified bidders emerge, the hearing will be on Sept. 22.
The terms set forth in A&P's filing call for bidders to bid for clusters of stores that correspond to the stalking horse bidders' packages. The Mount Kisco location is unique, however, in that the process specifically allows for it to be auctioned off separately. A court filing cites interest in the Mount Kisco store, which was the chain's top-performing location.
"Based on their negotiations and discussions with interested bidders, the Debtors are confident that there is significant interest in the Mount Kisco store and that it should generate significantly greater value if auctioned on a standalone basis," the filing states.
The Mount Kisco store, the filing shows, generated $9.2 million last year in earnings before interest, taxes, depreciation and amortization (EBITDA).
The local A&P is located in a shopping center called Mount Kisco Commons, which also hosts a Target, an Applebees and a small, standalone collection of other stores. Mount Kisco Commons is at the intersection of North Bedford Road (Route 117) and Preston Way.
The shopping center is owned by Urban Edge Properties, a publicly traded real estate investment trust (REIT). Urban Edge was spun off from Vornado Realty Trust in January. The company's properties list shows A&P's space is 50,787 square feet.
Urban Edge's ownership is through subsidiaries. Mount Kisco's assessment records show that the property is in two parcels and directly owned by a pair of entities called VNO 195 N Bedford Road LLC (for the Target side) and VNO AP 195 N Bedford Rd LLC (for the A&P side).
Urban Edge's most recent quarterly earnings report shows that it paid off a mortgage on the A&P parcel, which carried a principal of $12.1 million and an interest rate of 5.32 percent. The last payment was made on Feb. 11, which was the mortgage's maturity date. Urban Edge has a separate mortgage on the Target parcel, which matures in 2034.
Mount Kisco Mayor Michael Cindrich expressed disappointment regarding the bankruptcy. However, he said that Stop & Shop is something that would be successful at the location and expressed hope that a transition "should be seamless."
Don Sussman, president of Stop & Shop's New York Metro Division, touted the bid in a press release.
"We are very happy to have the opportunity to expand our presence in greater New York and serve new customers," he said.
The court filing can be read here. The list of stores with bidders is on pages 75 to 79.
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