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NEW YORK (TheStreet) -- Roundy's (RNDY) stock is gaining 64.22% to $3.58 on heavy trading volume on Wednesday morning after the Midwest grocer agreed to be acquired by Kroger Co. (KR) in an $800 million transaction, including debt.

Roundy's shareholders will receive $3.60 per share in cash, representing a 65% premium to Tuesday's closing share price.

Kroger plans to refinance Roundy's existing debt of $646 million and invest the cost savings of about $40 million into growth efforts over time.

Kroger will gain 151 stores, 101 pharmacies, two distribution centers and a commissary as part of the acquisition that is expected to close by the end of 2015.

The boards of both companies have approved the transaction, which is subject to regulatory approval and the successful completion of the tender offer.

The acquisition is boosting the Roundy's stock despite the grocer's disappointing fiscal 2015 third quarter financial results.

The company reported a loss of 13 cents on revenue of $971.82 for the quarter ended October 3, missing estimates of a loss of 9 cents per share on $979.91 million in revenue.

So far today, 8.69 million shares of Roundy's have exchanged hands, compared with its average daily volume of 266,698 shares.

TheStreet Recommends

Separately, TheStreet Ratings team rates ROUNDY'S INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate ROUNDY'S INC (RNDY) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: RNDY

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