(Reuters) - C&S Wholesale Grocers would be interested in buying the distribution business of grocer Supervalu Inc (SVU.N), which last week said it was exploring a sale of all or part of the company, the Wall Street Journal reported on Monday citing people familiar with the matter.
Supervalu, the third-largest U.S. grocery chain with brands such as Albertsons, Jewel-Osco and Save-A-Lot, on July 11 reported disappointing quarterly results and said it was suspending its dividend to fund aggressive price cuts aimed at winning back shoppers. It also said it had hired Goldman Sachs (GS.N) and Greenhill & Co to start a review of strategic options, including asset sales.
The Minneapolis-based company has been hamstrung by debt from its $12.4 billion acquisition of more than 1,100 Albertsons stores in 2006.
In recent years, it has lost market share to rivals like Kroger and Wal-Mart Stores Inc (WMT.N), which are known for holding down prices.
For the quarter ended June 16, Supervalu's distribution business turned in revenue of $2.48 billion, or more than 23 percent of overall sales.
Save-A-Lot, Supervalu's discount warehouse chain, is widely considered its most attractive asset. That business brought in revenue of $1.29 billion - about 12 percent of the total - in the latest quarter and has significantly higher margins than the company's other businesses.
A spokesman for Supervalu declined comment and representatives from C&S did not immediately return calls.
Shares in Supervalu closed up 6.9 percent at $2.48 on Monday following the report.
Reporting by Lisa Baertlein in Los Angeles; Editing by Tim Dobbyn