EX-99.3 6 ex99_3.htm EXHIBIT 99.3 Exhibit 99.3
The New A&P
Creating Shareholder Value
Acquisition of Pathmark Stores,Inc.
March 5, 2007
 
 
 
fresh thinking since 1859
This presentation contains forward-looking statements about the future
performance of A&P and Pathmark, which are based on
management’s assumptions and beliefs in light of the information
currently available to it. A&P and Pathmark assume no obligation to
update the information contained herein. These forward-looking
statements are subject to uncertainties and other factors that could
cause actual results to differ materially from such statements
including, but not limited to: statements about the anticipated closing
of the merger and the expected future business and financial
performance of A&P and Pathmark resulting from and following the
merger; competitive practices and pricing in the food industry
generally and particularly in A&P’s and Pathmark’s principal markets;
A&P’s and Pathmark’s relationships with their employees and the
terms of future collective bargaining agreements; the costs and other
effects of legal and administrative cases and proceedings; the nature
and extent of continued consolidation in the food industry; changes in
the financial markets which may affect A&P’s and Pathmark’s cost of
capital and the ability of A&P and Pathmark to access capital; supply
or quality control problems with A&P’s and Pathmark’s vendors; and
changes in economic conditions which affect the buying patterns of
A&P’s and Pathmark’s customers.
 
 
 
fresh thinking since 1859
Transaction Overview
§
A&P has reached an agreement to acquire
Pathmark Stores, Inc.
§
Total consideration of $1.3 billion to be paid in
cash, A&P stock and debt
§
All financing commitments are in place
§
Integration synergies of $150 million are
expected within 2 years
§
The Boards of Directors of A&P and Pathmark
have approved the transaction
 
 
 
fresh thinking since 1859
Transaction Overview
§
Pro forma, A&P shareholder base will be
comprised of:
•
40.9%Existing A&P public shareholders
•
44.8% Tengelmann Group
•
  9.0%Existing Pathmark public shareholders
•
  5.3% Yucaipa Companies
§
Expected to close in 2nd half of fiscal year
2007
•
Subject to Federal and State Regulatory review
•
Subject to A&P and Pathmark Stockholder approval
 
 
 
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Transaction Rationale
  A&P – Pathmark combination is strategically compelling
§
Improves cost structure and enhances ability to
better compete in fragmented Northeast
market 
§
Creates attractive portfolio of real estate and
store locations
§
Improved financial profile
•
$11 billion of combined revenues
•
EBITDA margins expected to double following
implementation of the integration plan
•
Expected annualized synergies of approximately
$150 million within 2 years
 
 
 
fresh thinking since 1859
Transaction Rationale
  A&P – Pathmark combination is strategically compelling
§
Strong Infrastructure
•
Information systems and a supply chain already
capable of handling additional stores
•
Leverage programs, best practices, management
capabilities across larger store network to improve
profitability through cost savings and sales growth
§
Combined company likely to achieve greater
value creation than standalone businesses
§
Combined company will be well positioned to
compete vigorously in the dynamic food and
consumables market in the Northeast
 
 
 
Stores
LTM Sales   (in millions)
Source:  A&P management and public filings
* Includes synergies
LTM EBITDA   (in millions)
LTM EBITDA Margin
Pro Forma Transaction Impact
 
 
 
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Next Steps
§
Federal and State Regulatory approval
§
A&P and Pathmark Stockholder approval
§
Integration Planning between A&P and
Pathmark management teams
§
Expected to close in 2nd half of fiscal year
2007
 
 
 
The New A&P
Creating Shareholder Value
Acquisition of Pathmark Stores,Inc.