American Agrees to Raise Bid for Lucky or Give Up Pursuit

American Stores Inc. must sweeten its bid for Lucky Stores Inc. by May 17 or give up its current bid for the Dublin-based supermarket chain, according to an agreement granting American Stores access to certain non-public information regarding Lucky’s operations.

Lucky, which has resisted being taken over by the owner of the rival Alpha Beta supermarket chain, said it agreed to share the confidential information while ensuring a number of protections for its shareholders.

American Stores must raise its bid to a per-share value higher than the $61 offered in a proposed leveraged buyout led by the New York investment firm Gibbons, Green, van Amerongen Ltd.

If it doesn’t raise its bid, American Stores agreed to terminate its current tender offer and otherwise not interfere with the pending Gibbons Green offer, Lucky said.

But Lucky said American Stores also agreed to extend its offer until at least June 1, when the Gibbons Green offer is scheduled to expire. The Salt Lake City-based company also agreed not to try to take over Lucky for at least two years, unless it offers a price greater than $61 a share, Lucky said.

American Stores started the bidding for Lucky with a $45-a-share offer that Lucky rejected in March.

Despite reaching agreement to provide American Stores the same non-public information provided other bidders, Lucky said it continues to recommend that stockholders accept the $2.35-billion Gibbons Green offer.

American Stores may raise its offer for Lucky, or it may use the information to make a bid for parts of Lucky such as its Florida and Arizona stores, said Ron Rotter, an analyst with Morgan, Olmstead, Kennedy & Gardner.

“This may be a way for them to get placated,” Rotter said, citing R. H. Macy Co.’s decision to drop its rivalry with Campeau Corp. for Federated Department Stores in exchange for the acquisition of some of the Federated properties.