What do these changes mean for investors?
Change is hard for everyone, but Kroger’s stock appears to be responding well. After the Harris Teeter Supermarkets Inc (NYSE:HTSI) acquisition on July 9, Kroger shares enjoyed a steady climb, which included establishing a new 52-week high of $39.97 at the end of July.
For Harris Teeter Supermarkets Inc (NYSE:HTSI) shareholders, the ride has not been as smooth. The stock has remained fairly flat, which is not surprising considering there is some debate as to whether the acquisition benefits shareholders. In fact, with multiple lawsuits already being filed by Harris Teeter Supermarkets Inc (NYSE:HTSI) shareholders in an attempt to halt the acquisition, this is hardly a done deal.
One recent such filing claims the board failed to take adequate measures to ensure shareholders were properly protected and that shareholders will not receive fair value for their shares. The all-cash transaction is valued at $49.38 per share, which, according to the lawsuit, is “woefully inadequate in light of Harris Teeter Supermarkets Inc (NYSE:HTSI)’s strong financial position and the complementary assets which a combination with (Harris Teeter Supermarkets Inc (NYSE:HTSI)) would bring to Kroger.”
If investors are looking for a pure grocery play, The Kroger Co. (NYSE:KR) is a solid investment option given its aggressive growth strategy largely driven by acquisitions and its ability to adapt to the changing grocery industry landscape. But for a more diversified retail investment option, look to the leader of the pack, Wal-Mart.
The article Major Changes at Kroger — Are They Good? originally appeared on Fool.com and is written by Kelli Bhattacharjee.
Fool contributor Kelli Bhattacharjee has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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