Filing Flows › Kroger (KR) › Takeover & LBO
Is Kroger (KR) a takeover target?
A leveraged buyout at today's price plus 30% ($90.29 a share) would return a loss of about 10% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $36.33 a share (−48% against today's $69.45). At $71.7B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 3.1% of companies with its figures were bought within a year (0.61× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $90.29 | today's $69.45 plus 30% |
| × shares | 655.0 million | |
| = Equity value | $59.1B | |
| + Debt refinanced | $15.9B | |
| − Cash | $3.3B | |
| + Other claims | $9.0M | preferred stock, minority interests |
| = Enterprise value | $71.7B | 13.7× EBITDA of $5.2B |
| Fees | $1.4B | 2% of the price |
| New debt | $28.7B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $44.4B | 61% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $145.8B | $5.2B | $2.2B | −$848M | $29.6B |
| Year 2 | $145.5B | $5.1B | $2.3B | −$915M | $30.5B |
| Year 3 | $146.7B | $5.2B | $2.3B | −$1.1B | $31.6B |
| Year 4 | $149.5B | $5.3B | $2.4B | −$1.3B | $32.9B |
| Year 5 | $154.0B | $5.4B | $2.5B | −$1.5B | $34.4B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 11.1× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $60.6B | |
| − Debt left | $34.4B | |
| = Buyer's equity | $26.1B | |
| Money multiple | 0.59× | on $44.4B put in |
| Buyer's yearly return (IRR) | −10.1% |
Price against return
What the buyer makes at other premiums over today's $69.45; the IRR reaches 20% at $36.33 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $76.40 | −5.8% |
| 20% | $83.34 | −8.1% |
| 30% | $90.29 | −10.1% |
| 40% | $97.23 | −11.8% |
| 50% | $104.18 | −13.4% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $147.6B | |
| EBITDA, last 12 months | $5.2B | 3.5% of revenue |
| Depreciation and amortization | $3.3B | |
| Capital spending | $3.9B | |
| Debt | $15.9B | |
| Cash | $3.3B | |
| Share price | $69.45 | on Nov 5, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows -1.3% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 15% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Kroger would cost about $92.02 a share, $60.3B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $83.34 | $54.6B |
| Median | 32.5% | $92.02 | $60.3B |
| High end (a quarter paid more) | 51.8% | $105.43 | $69.1B |
The odds, from history
Historically 3.1% of companies with its figures were bought within a year (0.61× the average). Its figures put it in decile 2 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Kroger's latest quarter
Kroger, Q2 FY27: revenue $34.6B (+2% year over year), operating margin 2.8%, net earnings $642M, operating cash flow $1.3B. The chart follows the revenue to costs, profit and cash.
Questions
Is Kroger being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Kroger?
A leveraged buyout at today's price plus 30% ($90.29 a share) would return a loss of about 10% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $36.33 a share (−48% against today's $69.45). At $71.7B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Kroger cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Kroger would cost about $92.02 a share, $60.3B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.