NEW YORK (TheStreet) -- Shares of Supervalu (SVU) were surging 6.14% to $4.84 on heavy trading volume early Thursday afternoon as private equity firm Onex looks to buy the company's Save-A-Lot discount grocery chain, sources say, Reuters reports.

The chain is valued at up to $1.8 billion, sources told Reuters.

Supervalu, an Eden Prairie, MN-based wholesale distributor, has been mulling the sale of the chain in recent months as an alternative to a spin-off.

The company said a year ago that it could spin-off the business, but is expected to make a final decision on the Save-A-Lot unit in the next two weeks, Reuters notes.

A sale would deprive the company of one of its fastest-growing units. But it would allow Supervalu to focus on improving profit margins in its core wholesale distribution business which has struggled amid pricing pressures, lower traffic and customer attrition.

More than 5.84 million shares of Supervalu have traded hands so far on Thursday vs. the 30-day average volume of 4.48 million.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rated this stock as a "hold" with a ratings score of C.

Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and poor profit margins.

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

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