Forms New Holding Company Called Delhaize America, Inc.
to Facilitate Acquisitions
Announces Plans to List on the New York Stock Exchange
SALISBURY, NC Bill McCanless, President and Chief Executive Officer of Food Lion, Inc. (Nasdaq: FDLNA, FDLNB), announced today a series of initiatives intended to pave the way for the Company’s next stage of growth as it plans to expand locally and nationally.
Steps Food Lion plans to take include:
- Forming a holding company, to be called Delhaize America, Inc., in order to facilitate future acquisitions as well as the expansion of the Company’s existing operations.
- Listing Delhaize America, Inc. on the New York Stock Exchange beginning September 9th, which the Company expects to enhance its visibility within the investment community. The Company’s two classes of common stock will be traded on the NYSE under the symbols “DZA” and “DZB.” Simultaneously, Food Lion, Inc. will delist from the Nasdaq National Market system.
- Authorizing a one-for-three reverse stock split of the Company’s outstanding shares of common stock (Classes A and B).
- Authorizing 500 million shares of a new class of “blank check” preferred stock that could be issued in connection with private offerings of shares for cash, dividends payable in Company stock, acquisitions, implementation of employee benefit plans, etc. Blank check preferred stock would enable the Company’s Board of Directors to create an issue of preferred stock for which the preferences, powers and rights (including voting rights) would be determined by the Board of Directors.
- Increasing the maximum number of authorized directors of the Company from 10 to as many as 14.
McCanless said, “The supermarket industry is undergoing dramatic change and we want our shareholders to know that this management team is fully committed to a growth strategy that will build shareholder value.
"These changes make for a stronger organization that we expect will increase long-term shareholder value and enhance our ability to serve our customers," said McCanless. "We expect our new corporate structure to promote greater flexibility in the daily operations of our different businesses. Delhaize America, Inc. will serve as an umbrella under which our portfolio of different brands can flourish. As we continue to expand our market presence, our new structure will also position us to seamlessly integrate acquisitions.
“We also believe forming a holding company and listing on the New York Stock Exchange will facilitate management’s goal to attract additional high-quality acquisition candidates, particularly outside the Company’s present operating region as we pursue our mission of becoming one of the largest and most respected food retailers in the world,” said McCanless.
When Delhaize America lists on the New York Stock Exchange beginning September 9, 1999, the Company will be among the top 15 percent of listed companies in terms of sales volume and market capitalization.
Richard A. Grasso, Chairman and Chief Executive Officer of the New York Stock Exchange, said, “We’re delighted to welcome Delhaize America, one of America’s largest supermarket companies, to the New York Stock Exchange. Widely recognized by shoppers for quality products, extra low prices and superior customer service, this is precisely the type of high-quality company the NYSE is proud to attract. We look forward to a fruitful relationship with this dynamic company.”
The corporate realignment initiatives require shareholder approval. The Company has scheduled a special shareholders' meeting in New York City on September 7, 1999 for this purpose. Following the formation of the Delhaize America holding company, certain assets and operations of the Company’s businesses, including its Food Lion and Kash n’ Karry supermarkets, will become subsidiaries of Delhaize America. The move to the New York Stock Exchange does not require shareholder approval.
A Proxy Statement detailing the Company’s proposals is being mailed to shareholders in advance of the special meeting.
Separately, Food Lion said it is in the process of converting 51 of its Florida supermarkets to the format of its Kash n’ Karry subsidiary, which it acquired in 1996. All the conversions are expected to be completed by September 1, 1999, with remodels and expansions taking place over the next 18 months. Company-wide, Food Lion also has one of the most aggressive organic growth strategies in the supermarket industry, with expected retail square footage growth of approximately 8.5 percent in 1999. It plans to open 94 new stores and remodel 140 stores this year.
As of August 6, 1999, Food Lion has more than 466 million shares outstanding and a total market capitalization of approximately $5.49 billion, with a market capitalization of $2.8 billion in Class A shares and $2.7 billion in Class B shares. Until September 9, 1999, Food Lion shares will continue to be traded on the Nasdaq National Market System under the symbols, "FDLNA" and "FDLNB."
With 1998 sales of $10.2 billion, Delhaize America will be one of the nation's largest supermarket chains. The Company and its more than 92,000 employees serve more than 10 million customers a week at its 1,143 Food Lion, 104 Kash n’ Karry, and 11 Save ‘n Pack supermarkets in 11 states.
This document contains forward-looking statements that involve uncertainties. Factors that could cause results to differ materially from those in the forward-looking statements are detailed from time to time in reports filed by the Company with the SEC, including Forms 8K, 10Q and 10K.
Contact Information
Media
Chris Ahearn
Director of Corporate Communications
(704) 633-8250 Ext. 2892 |
Investors
Dave Hogan
Investor Relations Manager
(704) 633-8250 Ext. 2529
|
Contact: Chris Ahearn (704) 633-8250, Ext. 2892