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Neporent & Tessler Quit Supervalu Board

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Two members — Mark Neporent and Lenard Tessler — stepped down from Supervalu Inc.’s (SVU - Free Report) board on Mar 6, 2014.

The resignation followed the announcement of the takeover of grocery chain, Safeway Inc. by AB Acquisition LLC, an entity controlled by a Cerberus-led investor group. During fourth-quarter 2013 earnings release, Safeway announced that it will merge with Cerberus Capital Management L.P.’s Albertsons in a deal valued at approximately $9.0 billion. The deal is expected to close in the fourth quarter of 2014.

Neporent and Tessler commented that in the light of Safeway deal, it was in the best interests of the company to leave the team as a person neutral to Cerberus and Supervalu will be beneficial. Per the agreement between Supervalu and Cerberus, the replacement of Tessler and Neporent will be decided by Symphony Investors.

They had joined the board when the company’s grocery banners were sold to Cerberus led investing group Symphony Investors LLC in Mar 2013. As part of broad-based strategic alternatives, Supervalu sold five of its underperforming grocery chains —  Albertson's, Jewel-Osco, Acme, Shaw's and Star Market — a total of about 877 stores, to private equity firm Cerberus Capital Management L.P. Per the agreement, Symphony Investors acquired 5.5% of Supervalu for a total of $46.7 million.

Post the deal, Supervalu reorganized its board and Tessler and Neporent — two designees of Symphony Investors — were appointed as Directors. Previously, Tessler was serving as the co-head global private equity and senior managing director of Cerberus Capital Management. Prior to joining Cerberus in 2001, Tessler was the founder and managing partner of private equity firm, TGV Partners from 1990 to 2001. With three decades of leadership in private equity and business investment firms, he is a member of the Cerberus Capital Management Investment Committee.

Prior to joining Supervalu, Neporent served Cerberus Capital in the capacity of chief operating officer and general counsel. He has more than 30 years of experience, having served as a partner in the Business Reorganization/Finance Groups of Schulte Roth & Zabel LLP.

Currently, Supervalu carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the food/miscellaneous sector worth considering are Post Holdings Inc. (POST - Free Report) and Diamond Foods Inc. . Both the stocks carry a Zacks Rank #2 (Buy).

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