Bi-Lo LLC, the owner of more than 200 supermarkets, agreed to buy Winn-Dixie Stores Inc. for about $560 million to expand in its home market of the South.
The cash offer of $9.50 a share is 75 percent higher than Winn-Dixie's closing price on Dec. 16, the companies said Monday in a statement. The retailers said they don't expect to close any stores as part of the transaction.
The deal is the fourth-largest acquisition of a food retailer in the United States in the past five years, according to data compiled by Bloomberg. The takeover creates a company with about 690 grocery stores in the Southeast and 63,000 workers.
Winn-Dixie has about 30 stores in the Tampa Bay area. There is no plan to change the name of those stores at this time.
Winn-Dixie rose 70 percent to $9.23 at 9:51 a.m. in New York. The Jacksonville-based company's shares had fallen 24 percent this year beforeMonday.
Bi-Lo, based in Greenville, S.C., agreed to pay a premium of more than 74 percent the average 20-day trading before the announcement, according to data compiled by Bloomberg. The buyers of more than 60 U.S. companies in the food-retail industry paid an average premium of 36 percent in the past five years, the data show.
Lone Star Funds, a Dallas-based private-equity firm, agreed to acquire Bi-Lo from Royal Ahold NV (AH), a Netherlands-based supermarket operator, in 2005. Bi-Lo filed for bankruptcy in South Carolina in March 2009 with a maturity looming on a $260 million term loan. It emerged from Chapter 11 reorganization in May 2010.
Winn-Dixie's board has approved the transaction and recommends shareholders vote in its favor. The combined company's executive team and headquarters location will be decided as the takeover moves closer to completion, according to the statement. The deal is expected to close in the next 60 to 120 days.