Supervalu explores possible sale following shareholder pressure - source

By Harry Brumpton

(Reuters) - U.S. supermarket operator Supervalu Inc (SVU.N) is exploring a potential sale following pressure from activist shareholders, including Blackwells Capital LLC, a person familiar with the matter said on Friday.

Supervalu is working with investment banks Lazard Ltd (LAZ.N) and Barclays Plc (BARC.L) as it explores its options, the source said, asking not to be identified because the matter is confidential.

Supervalu, Lazard and Barclays could not be immediately reached for comment. Bloomberg News first reported on Supervalu's sale deliberations.

Supervalu shares ended up 9.3 percent at $16.75 on Friday, giving the company a market capitalisation of $643 million.

In February, Blackwells announced plans to nominate three directors to the company's nine-member board. Last month, it increased its nominees to six.

The fund first called on the company in October to "unlock the value" of its owned real estate, whose value it said exceeds SuperValu's market cap, and also consider selling about 30 percent of the 217 stores it owns.

It also wanted Supervalu to start paying a dividend and institute a share buyback plan.

Supervalu has been remaking itself as a distributor following the December 2016 sale of its Save-A-Lot grocery business to Canadian buyout firm Onex Corp (ONEX.TO) for $1.37 billion.

Supervalu has more than 3,000 owned, franchised and independently-owned grocery stores across the United States.

The company has been reluctant to shed the stores it owns, concerned it would not be able to rely on that base for its supply business.

(Reporting by Harry Brumpton in New York; editing by Rosalba O'Brien and Leslie Adler)