Potential Buyer Found For Grand Union Chain

WAYNE, N.J. — The Grand Union Company announced this week that it has entered into a letter of intent providing for the purchase by C&S Wholesale Grocers, Inc., of substantially all of the Grand Union Company’s assets and business. Under the terms of the letter of intent, C&S, which is Grand Union’s principal supplier, will pay slightly in excess of $300 million in cash upon closing of the transaction. Included in the assets to be acquired pursuant to the letter of intent are approximately 185 of Grand Union’s 197 stores and the company’s distribution center in Montgomery, New York. C&S intends to assign its right to purchase certain of these assets to third parties.

The closing of the transaction is subject to the signing of a definitive agreement and other customary closing conditions, including governmental antitrust approval, Bankruptcy Court approval, and C&S obtaining financing pursuant to a bank commitment letter, which it expects to obtain shortly. This transaction will also be subject to higher or better bids for Grand Union’s assets, which may be obtained at an auction to be held on November 16, 2000, pursuant to Bankruptcy Court procedures. Grand Union anticipates that a definitive agreement would be entered into prior to the auction.

Based on the C&S letter of intent and indications of interest received from other parties, Grand Union does not believe that any distribution will be made to its shareholders or warrant holders following the completion of the sale process or pursuant to a chapter 11 reorganization plan.

Grand Union filed a voluntary chapter 11 petition in the US Bankruptcy Court in Newark, New Jersey, on October 3, 2000, with the stated intention to facilitate the planned sale of the company and provide for additional funding during the sale process.

Grand Union operates 197 retail food stores in Connecticut, New Jersey, New York, Pennsylvania, and Vermont.