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Kimco's stake in $9B grocery store chain Safeway deal

The location of New Hyde Park-based Kimco Realty

The location of New Hyde Park-based Kimco Realty on Jan. 6, 2011. (Credit: Newsday / J. Conrad Williams Jr.)

Kimco Realty Corp., a real estate investment trust based in New Hyde Park, will have a stake in the $9.4 billion purchase of grocery store chain Safeway, Inc. by private equity firm Cerberus Capital Management LP.

The deal, which was announced Thursday afternoon after the stock market close, will merge Safeway with fellow grocer Albertsons, which is owned by Cerberus through the company AB Aquisitions LLC. Kimco will contribute $90 million for the deal for a 9.94 percent equity stake in the combined venture, according to a news release from the company.

Cerberus will pay $40 per share to take Safeway private. The deal is expected to close in the fourth quarter of 2014.

Kimco put up $51 million for the Cerberus-led investment that acquired a portion Albertsons in 2006. Last year, the REIT invested another $37 million into the deal, according to the release.

Kimco, which is the largest owner of shopping centers in America, will also serve as strategic counsel to Cerberus on the deal. The company's stock did not move in after-market trading following the announcement.

Tags: kimco , safeway , private equity , cerberus , albertsons , investment , real estate

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