$12.3m P&C offer pulled
Price Chopper wants four of Penn Traffic's St. Lawrence County P&C supermarkets, but not for the $12.3 million mentioned in Friday's filing in U.S. Bankruptcy Court.
"The offer referred to in the filing was a verbal offer made prior to Bankruptcy Court," said Mona J. Golub, vice president of public relations and consumer services for Golub Corp., Schenectady, the parent company of Price Chopper. "That is no longer on the table. I don't know why they put that out. Right now, there is no formal offer."
'EXTENSIVE NEGOTIATION'
According to the 40-page filing submitted by Penn Traffic, Syracuse, to U.S. Bankruptcy Court in Delaware, Price Chopper offered a bid of $12.3 million Oct. 22 for P&C stores in Canton, Potsdam, Massena and Gouverneur, and that the parties reached an agreement Friday.
"Since the receipt of the offer, the parties have been in negotiations to finalize the terms of the sale," the bankruptcy filing stated. "The agreement represents the culmination of an extensive negotiation process."
'MUCH LARGER PROCESS'
Penn Traffic Vice President for Advertising and Marketing Terry A. Kushner e-mailed a statement Saturday.
"The bid by Price Chopper for the four stores marks the beginning of a much larger process," he wrote. "The company currently anticipates that the approval process regarding the transaction involving these four New York stores will conclude by the end of December."
Mr. Kushner couldn't be reached for further comment.
Under the terms of the bankruptcy filing, a Price Chopper bid could initiate competing offers from other companies and an auction that would have to be approved by Bankruptcy Court.
Ms. Golub said talks with Penn Traffic will continue on the four stores. She had no comment on whether her company is interested in any of P&C's other locations.
"We have been in discussions with Penn Traffic and continue to be," she said. "The details change daily. Once bankruptcy is declared, the whole world changes."
Two weeks ago, Penn Traffic announced it was closing or selling 79 supermarkets by Feb. 15 as part of a Chapter 11 bankruptcy. The stores operate under the names Bi-Lo, P&C and Quality in New York, Pennsylvania, Vermont and New Hampshire.
Since Price Chopper already has stores in Watertown, Ogdensburg and Malone, it makes sensefor the chain to acquire P&C stores in Gouverneur, Canton, Potsdam and Massena.
"It would extend our territory that we can access with our existing distribution system," Ms. Golub said.
She said had no time frame for when the stores could open under the Price Chopper banner, because they would be refurbished and set up differently.
"Clearly, we don't even have a go-ahead on the purchase," she said.
Price Chopper has talked with Penn Traffic for years about stores it might acquire, Ms. Golub said.
"It's been apparent over the industry that they've had some difficulties," she said.
It remains uncertain whether the four stores Price Chopper wants in St. Lawrence County would retain union affiliation if their purchase goes through. Of P&C's 5,700 overall employees, approximately 87 percent belong to a union. Ninety-three percent of unionized employees belong to locals of the United Food and Commercial Workers union, while 7 percent belong to the International Brotherhood of Teamsters.
Gregory P. Gorea, executive assistant to the president of UFCW Local One, said he remained in the dark.
"We have a meeting Monday in New York City with Penn Traffic attorneys, and then we'll know more," he said.
An employer who takes over a unionized work site is required to recognize the union if more than half of the former employees are rehired by the purchaser. P&C stores in Fulton and Oswego previously taken over by Price Chopper didn't stay unionized, but Ms. Golub said the company's benefit package is competitive and that employees own 52 percent of the stock.
"In the past, everyone who worked at P&C was interviewed for jobs and a substantial number were placed in positions in our company," she said. "I really don't know what the numbers were."
