Nash Finch courtship with Spartan Stores started two years ago, SEC papers say

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: October 18, 2013 - 5:15 AM

Spartan showed interest in the grocery wholesaler in 2011, SEC papers say.

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Nash Finch Co. executives began talking to Spartan Stores about an acquisition in 2011, new documents show, but initially they wanted to buy Spartan. This summer, Spartan bought Nash Finch.

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The $1.3 billion purchase of Nash Finch by Michigan’s Spartan Stores started with a call from the Edina-based grocery wholesaler back in early 2011.

But before the all-stock deal was announced in July, a second unnamed suitor briefly came calling on Nash Finch, according to a federal securities document filed this week.

Nash Finch “initiated discussions with Spartan Stores regarding a potential business combination,” according to the filing with the Securities and Exchange Commission. Management of both companies then had numerous communications, and in May 2011 Nash Finch submitted a preliminary, nonbinding letter of interest offering to buy Spartan Stores in an all-cash merger.

Further talks followed. But after the disruptions in financial markets during 2011’s second half, Nash Finch notified Spartan Stores it was unwilling to go further on the financing terms then available and wanted to temporarily cease negotiations.

Talks resumed between the two companies in the fall of 2012 after Spartan’s board determined that it would explore a potential combination with Nash Finch. They got more serious into the winter and spring of 2013, but then in April, Nash Finch CEO Alec Covington got an unsolicited call from a “strategic competitor,” the SEC filing said.

The unnamed competitor said his board wanted to know whether Nash Finch was interested in “exploring a strategic combination.” Covington went back to his own board of directors and called Spartan to say he’d gotten an indication of interest from another company.

But less than two weeks after the unnamed competitor called Covington, the company informed the Nash Finch CEO it was no longer able to explore any deal due to “other pending matters.” No further talks followed.

The deal with Grand Rapids, Mich.-based Spartan Stores, will create a company combining Nash Finch’s strength in the Midwest with Spartan’s solid position in its home state. The company’s headquarters have not been named, but it will be led by Spartan’s CEO and much of Spartan’s top management.

 

Mike Hughlett • 612-673-7206

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