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UPDATE 3-Winn-Dixie operator Southeastern Grocers pulls IPO

(Recasts with official confirmation)

NEW YORK, Jan 28 (Reuters) - Southeastern Grocers Inc , the operator of U.S. supermarket chains Winn-Dixie and Harveys, decided on Thursday to cancel its initial public offering, the second time in recent years that it pulled an IPO.

Southeastern Grocers did not specify the reason for withdrawing the IPO. The company made the decision due to a lack of demand at the price range it was targeting, Reuters reported earlier on Thursday, citing a person familiar with matter.

“The company will continue to evaluate the timing for the proposed offering as market conditions develop,” Jacksonville, Florida-based Southeastern Grocers said in a statement.

Southeastern Grocers had also pulled a planned IPO in 2014.

Southeastern Grocers shareholders had aimed to sell 8.9 million shares on Thursday at a price range of $14-$16 per share, which would have earned them up to $142.4 million. Southeastern would not have received proceeds from the IPO.

Southeastern Grocers was formed in 2012 by private equity firm Lone Star Funds to house the Winn-Dixie and BI-LO grocery store brands. The company filed for bankruptcy in 2018, hit by competition from bigger retailers.

Southeastern Grocers and many other grocery corporations have seen a surge in demand from customers stocking up on household items while under COVID-19 restrictions. The company said it generated $7.4 billion of net sales for the 40 weeks ended in September last year, up 16.6% from the previous year. It swung to a net income of $235 million from a net loss of $93.7 million.

Nevertheless, grocery chains have faced a lukewarm reception from investors.

Rival U.S. supermarket operator Albertsons Companies Inc in June completed a long-awaited IPO, but sold fewer shares than planned and at a price below its target range.

Shares in Kroger Co are flat compared with their price six months ago, while the benchmark S&P 500 Index rose 17.7% over the same period.

Southeastern Grocers operates 419 stores across Florida, Georgia, Alabama, Louisiana and Mississippi. Its other brand includes Fresco y Más. (Reporting by Joshua Franklin in Miami and Chibuike Oguh in New York; Editing by Leslie Adler)

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