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Blue Square Advances to Two-Year High on Buyout Report

Alon Blue Square Israel Ltd., the country’s second-largest supermarket operator, climbed to a two-year high in New York after Globes reported that Catterton Partners is in talks to acquire part of its stores.

American depositary receipts of Blue Square, the owner of Mega stores, jumped 17 percent to $4.65, the highest level since December 2011. Shares in Tel Aviv gained 12 percent to 16.70 shekels, or $4.74. The rally boosted the company’s market capitalization to $306.7 million.

Catterton Partners, the private-equity firm that purchased restaurant chain Noodles & Co. in 2010 for an undisclosed amount, is in talks to buy 55 percent of the supermarket chains for 1 billion shekels ($284 million), Globes reported, without saying where it obtained the information. Groupe Auchan SA, a French supermarket company, is expected to join the deal, according to the newspaper.

“The price mentioned in the report, of a 1 billion shekels valuation, leaves significant upside for Blue Square on its Mega holdings,” Zach Herzog, head of international trade at Psagot Securities, a unit of Psagot Investment House Ltd., which manages more than 178 billion shekels said by phone from Tel Aviv today. “If the deal closes, the market assumes the new management would extract value from the business.”

A Tel Aviv-based spokeswoman for Blue Square declined to comment on the acquisition talks when contacted by phone. Eric Brielmann, a spokesman for Catterton with an outside firm in New York, also declined to comment. Francois Cathalifaud, Auchan’s spokesman, didn’t immediately return a phone call seeking comment.

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