The Work

December 19, 2011 6:11 PM

Five Firms Advise as Bi-Lo Bags Winn Dixie in $560 Million Deal

Posted by Tom Huddleston Jr.

Supermarket chain Bi-Lo just crossed rival Winn-Dixie off its shopping list.

Greenville, South Carolina–based Bi-Lo has agreed to buy the larger Winn-Dixie for $560 million, the companies announced Monday.

Under terms of the deal, which joins two supermarket chains that have emerged from bankruptcy within the past five years, Bi-Lo will pay $9.50 in cash for each Winn-Dixie share—a premium of 75 percent over the company's stock price as of the close of trading Friday.

Gibson, Dunn & Crutcher is serving as Bi-Lo's outside counsel on the transaction, with a team led by Dallas corporate partner Jeffrey Chapman. Corporate partner Eduardo Gallardo, banking partner Joerg Esdorn, environmental partner Thomas McHenry, employee benefits partner David Schiller, and tax partner David Sinak also are advising.

Chapman, who joined Gibson, Dunn from Vinson & Elkins in January, was a part of a V&E team that advised Bi-Lo on its bankruptcy filing in 2009.

Hunton & Williams is advising Bi-Lo on related tax matters, according to the press release announcing the deal. A spokeswoman for the firm declined to comment on which Hunton lawyers are working on the matter.

The deal, which is expected to close within 120 days subject to shareholder and regulatory approval, was negotiated by a special committee made up of Winn-Dixie board members. For legal representation, the committee turned to a Paul, Weiss, Rifkind, Wharton & Garrison group that includes corporate chair Robert Schumer and corporate partner Jeffrey Marell.

Winn-Dixie itself hired King & Spalding and Greenberg Traurig to advise on the sale. King & Spalding's efforts are being led by Atlanta-based M&A cohead Michael Egan and corporate partner C. William Baxley, along with a group that includes antitrust partner Jeffrey Spigel, corporate counsel Laura Hewett, and employee benefits counsel Mark Kelly. The firm also served as debtor's real estate counsel to Winn-Dixie in connection with some of the company's bankruptcy proceedings.

Greenberg's team includes Miami-based corporate and securities shareholders Ira Rosner and Lorne Cantor, and global corporate and securities chair Gary Epstein.

Winn-Dixie filed for Chapter 11 bankruptcy protection in February 2005, emerging in November 2006. Am Law Daily sibling publication The Am Law Litigation Daily has previously reported that the chain closed more than 360 stores—roughly 40 percent of its locations—before emerging from bankruptcy. (Milbank, Tweed, Hadley & McCloy served as counsel to the creditors' committee in that case; Skadden, Arps, Slate, Meagher & Flom and Smith Hulsey & Busey acted as debtor's cocounsel.)

Bi-Lo emerged from bankruptcy last year thanks, in part, to a $150 million investment by its parent company, Texas private equity firm Lone Star Funds. In addition to V&E, Bi-Lo was represented in those proceedings by Nelson Mullins Riley & Scarborough, according to our prior reporting.

Jacksonville, Florida–based Winn-Dixie has some 480 stores, while Bi-Lo has 207. The combined companies would employ almost 63,000 people at stores in eight southeastern states under those stores' existing names. Georgia is the only state in which both companies currently operate. Bi-Lo has locations in North Carolina, South Carolina, and Tennessee. Winn-Dixie's other stores are in Florida, Alabama, Louisiana, and Mississippi.


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