The Tribune

By NEIL HARTNELL

Tribune Business Editor

CITY Markets' principal yesterday said "two very serious" Bahamas-based players were now assessing the possible acquisition of the struggling five-store supermarket chain, describing them as "some of the most respected business people in this town and business".

Mark Finlayson, head of the Finlayson family-owned vehicle, Trans-Island Traders, which holds the 78 per cent majority stake in City Markets' operating parent, Bahamas Supermarkets, told Tribune Business he would probably have closed a deal to sell control on Monday had it not been for the emergence of Bahamas-based interest.

Describing himself as "very confident" that a deal to ultimately save the City Markets stores and 300 jobs would be worked out, Mr Finlayson suggested it was now unlikely that the five locations would be closed on Friday - as many staff had feared.

Acknowledging that this had been "one option" if no buyer willing to take over majority ownership had been found, Mr Finlayson indicated the increased buyer interest meant this might not be "necessary".

He added, though, that whatever deal was worked out, the Finlayson family - which has invested $19 million and counting into City Markets since taking control for just $1 in November 2010 - would "lose money".

And he also acknowledged that the situation facing Bahamas Supermarkets' 22 per cent minority investors "does not look too promising", arguing that the value of their equity investments had already been "wiped out" by the disastrous BSL Holdings ownership group prior to his family taking over.

"There are two new players, very serious, who have come into the middle of the mix, and in the last week," Mr Finlayson told Tribune Business. "If not for them, I think we'd have closed the deal on Monday. But by the nature of who they are, I've got to take a look at what they're offering.

"They're very strong local people. Some of the most respected business people in this town are now involved; some of the most respected people in this business are now involved."

Mr Finlayson declined to comment when pressed for the identities of all potential purchaser parties - both Bahamas-based and foreign - when pressed by Tribune Business. Yet his description indicates that Supervalue and its president/owner, Rupert Roberts, may have jumped into the fray.

However, Mr Roberts did not directly confirm any current interest from Supervalue in City Markets - or any of its store sites - when contacted by Tribune Business yesterday.

While confirming that Supervalue had been interested in its supermarket chain rival ever since US grocery retailer, Winn-Dixie, placed it up for sell in 205-2006, Mr Roberts said he was "waiting, like you" to see what happened with City Markets.

"In all the years, they've never offered it to us," he told Tribune Business. "We were interested 10 years ago before Winn-Dixie sold it, and our interest has never waned since."

Supervalue and Mr Roberts offered $30-$35 million for City Markets when it was put up for sale by Winn-Dixie in 2006, but never came close to the $54 million winning bid submitted by Bahamas Supermarkets.

Tribune Business contacts had spotted Mr Roberts and his officials, notebooks in hand, assessing City Markets' Cable Beach store at the weekend, indicating their interest had been renewed again.

Mr Roberts, though, downplayed this, saying: "We do that all the time. From there, we went to Solomon's Fresh Market. That's a normal thing. We stop in the others' stores from time to time, seeing store managers we know, and ask them what's going on. They claim they don't know."

Several observers have suggested that Mr Finlayson and his family have been talking up the level of interest in acquiring City Markets, or at least some of its store locations, in an effort to spark a bidding war.

Mr Roberts appeared to allude to this, saying it was costing the Finlayson family substantial sums every week to keep the five-store chain going. "It's costing them to hold on. It's really expensive for them to hold on," he added. "If they've got three, four, five bids, I'd probably take the best one."

It is also unclear whether Supervalue would want the additional expense associated with additional store locations, especially since it has existing outlets in close proximity to at least three of City Markets' Nassau stores.

Tribune Business can reveal that Mr Finlayson was initially seeking $14 million for the entire City Markets operation when he approached BISX-listed AML Foods in January 2012. However, as previously reported, the two sides were so wildly far apart on valuation - AML valuing the business at substantially less due to its shrunken sales and customer base, and reduced inventory - that the talks between the two never became even remotely serious.

Meanwhile, Mr Finlayson yesterday declined to put a date on when a sale of all, or part, of City Markets' business would be achieved.

"I think something will happen very soon, given the players that are involved," he told Tribune Business, "and the pressing nature of everyone involved. They are very aggressive.

"I'm very confident I'm going to close a deal, and close a deal quickly. I'm not very confident who it will be, but I'm very confident one of the players will come through. It's very competitive right now, and it's really heating up, which is good news for all parties."

Seeking to calm the fears of a City Markets' workforce which is now "closer to 300" persons in size, Mr Finlayson said no official decision to close its five locations on Friday had ever been taken.

"I spoke to the union, and spoke to staff outside the stores," he explained. "I put that [Friday closure] as one option if I can't get a deal done. But I don't know if that will be necessary.

Whether City Markets survives as a five-store chain, or is broken up into smaller parts with some locations closing, is unknown as yet. Mr Finlayson was able to confirm: "None of the parties I'm speaking to is interested in the name or carrying on as City Markets."

He added that "this whole exercise is about saving jobs at this point", and told Tribune Business: "You can guarantee we're [the Finlayson family] not going to make money off this going forward. We're going to lose money.

"It's an adventure we went into. When we went in the whole idea was that we were going to save the business, and it has not worked out that way. We have to stay on mission. It hasn't worked out, but we're not going to abandon the idea. We're going to save people's jobs, and be putting this chapter behind us as we move forward."

When it came to the complaints of Bahamas Supermarkets' 22 per cent minority investors about the lack of material information supplied to them and the fate of their investment, Mr Finlayson said: "They were wiped out prior to us going in there.

"It was valued relatively low from the beginning, and if we'd been able to turn it around we'd have been able to increase the value.

"We could have said at the beginning that we owe 99.99 per cent of the business, and we'll buy you other shareholders out for a penny each. That was an option for us, but we decided not to do it. We were trying to see if we could help those shareholders, but it's not looking too promising going forward."