The Tribune

By NEIL HARTNELL Tribune Business Editor THE FINLAYSON family is seeking a joint venture partner that would acquire a majority equity stake in the City Markets supermarket chain from it, high-level sources have told Tribune Business, with talks being held with at least "three local and foreign parties". While no deal has been sealed as yet, several well-placed contacts that some potential partners were "aggressively trying to take over all the stores" that remain in the struggling six-outlet food chain. It was suggested that something "might break" in several weeks. Tribune Business was told that the Finlayson family, which owns a 78 per cent stake in City Markets' operating parent, Bahamas Supermarkets, via its Trans-Island Traders vehicle, had been exploring its options for the business after arriving a crossroads requiring them to make a major decision. Essentially, the family has to decide whether to invest more of its own capital into City Markets in the hope that this will finally propel the ailing chain into turnaround mode, or seek a possible exit route through finding a new buyer. Sources familiar with developments said the Finlayson family was looking to achieve a similar arrangement to the one it had with Heineken for Commonwealth Brewery/Burns House, namely a joint venture where it retained a significant minority equity stake, but ceded majority control and management rights. "It really is a matter of them trying to come to an agreement with one of those interested parties," a high-level source told Tribune Business. "It's more than just a best offer, though, as they want to take into consideration the employees. But they are still intending to stay in." Mark Finlayson, City Markets' principal and head of Trans-Island Traders, declined to comment when Tribune Business questioned him on the matter. It is understood that the Finlaysons, through Trans-Island Traders, have invested some $19 million into City Markets since acquiring it for $1 in early November 2010 from the former BSL Holdings buyout group. Several Bahamian food retail industry sources have suggested that a further capital investment of at least $12-$15 million would be required to effect a true turnaround at City Markets, not just stabilise the business. That would be in line with Mr Finlayson's original estimate, relayed to Tribune Business in late 2010, that his family was eyeing at least a $35 million spend to revitalise the supermarket chain. The potential joint venture parties' identities are unknown at this stage. It is unclear who the Bahamian groups would be, and highly unlikely that any established food retail industry players - the likes of Supervalue and AML Foods - would be interested in City Markets, especially in a joint venture. The Finlaysons, who took over a business driven into near-bankruptcy by the former BSL Holdings ownership, saw City Markets suffer a $16.587 million net loss prior to extraordinary items for the year to end-June 2011.