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Apollo Management Is Buying Fresh Market for $1.36 Billion

Specialty grocery retailer Fresh Market said on Monday it agreed to be acquired by private equity firm Apollo Global Management for about $1.36 billion in cash.

The $28.50 per share offer represents a premium of 24% to Fresh Market’s Friday close.

The offer is at a 53% premium to Feb. 10, the day before Reuters reported that Apollo Global was among buyout firms participating in an auction process for Fresh Market.

Fresh Market said on Monday its board had unanimously approved the deal, except chairman and founder Ray Berry.

Berry recused himself from all discussions related to a review of strategic alternatives and from voting on the transaction, the retailer said.

Reuters had earlier reported, citing sources, that Berry was himself considering taking the company private.

Berry and his son Brett collectively own about 9.8% of Fresh Market’s outstanding shares.

The deal that has fully committed financing in place is expected to close in the second quarter of 2016.

Fresh Market has 183 stores, which it operates across 27 states. Its predominately southeastern locations include North Carolina, Florida, and Georgia. Its Mid-Atlantic and Midwest locations include Connecticut, New York, Kansas, Illinois, and Oklahoma.

Last year, Fresh Market hired Rick Anicetti as chief executive to help battle low margins and declining same-store sales. He had previously served for eight years as President and CEO of Food Lion LLC’s grocery stores.

The deal underscores Apollo’s confidence that it can turn around companies in the highly competitive U.S. grocery sector. The New York-based buyout firm’s past investments include Sprouts Farmers Market and Smart & Final Stores.

J.P. Morgan Securities is financial adviser to Fresh Market, while Barclays, RBC Capital Markets, Jefferies and Macquarie Capital are advising Apollo.