updated 12/16/2005 7:17:01 PM ET 2005-12-17T00:17:01

An investment group including Cerberus Capital, Kimco Realty Corp. and Minnesota-based supermarket chain Supervalu Inc. is near a deal to buy Albertson’s Inc., the second-largest U.S. supermarket chain, for about $9.6 billion, The Wall Street Journal reported Friday.

The deal, which the newspaper said was valued at $26 per share, would put an end to a three-month auction for Boise-based Albertson’s, which has suffered from lagging results, a stagnant share price and competition from lower-cost rivals including Wal-Mart Stores Inc.

Albertson’s shares rose 34 cents, or 1.4 percent, to close at $24.33 on the New York Stock Exchange.

The Journal, which cited unidentified people familiar with the matter for its report, also said Albertson’s is continuing separate talks to sell its pharmacy business to CVS Corp., for as much as $4 billion of the overall purchase price.

“Beyond the Sept. 2 announcement, I have no comment,” said Shannon Bennett, an Albertson’s spokeswoman. The company put itself up for sale on that date. She also refused to confirm the newspaper’s report that its board planned to meet this weekend.

The Journal said the transaction could be announced after the board meeting. According to the report, the Cerberus group would assume $6.4 billion in Albertson’s debt as part of the deal.

Spokesmen for Cerberus, based in New York, Stamford, Conn.-based Kimco, and Eden Prairie, Minn.-based Supervalu did not immediately return phone calls seeking comment.

Albertson’s was founded in 1939 on a downtown Boise street corner by entrepreneur Joe Albertson, who was among the first American grocery retailers to combine supermarkets with drug stores.

Albertson’s trails only The Kroger Co., based in Cincinnati, among supermarket-only operators, although the food business of Wal-Mart has eclipsed the both of them in recent years. Albertson’s presently has about 2,500 stores in 37 states, with about 240,000 workers. It stores include Albertson’s, Acme, Shaw’s and Jewel while its drug stores include Osco and Sav-on Drugs

In the three months ended Nov. 3, Albertson’s missed analyst expectations for a second quarter in a row and reduced its full-year profit outlook, adding to pressure to find a buyer. In the period, net income declined 30 percent to $77 million, from $110 million in the third quarter of 2004.

For the first nine months of the fiscal year, it earned $284 million, or 76 cents a share, up from $249 million, or 67 cents a share, a year ago. Nine-month sales rose to $30.13 billion from $28.76 billion a year ago.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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