Grand Rapids company strikes black gold

[snoogit]

I don't mean to rain on anyone's parade, but if you talk to anyone who worked or works in management/corporate at Meijer recently, they will tell you that it looks a lot like Meijer is getting themselves all dressed up for a buyer.

<{POST_SNAPBACK}>

Heh I've been saying that since I joined (former employee, glad as hell I left) The only thing stopping the Meijer Kids from selling the company is dear old dad. (Why else is Fred plastering his name everywhere all of a sudden?)

[Rizzo]

I hope thoes kids take something away from their father, BY KEEPING IT PRIVATE AND LOCAL!

[superNOVA]

I don't mean to rain on anyone's parade, but if you talk to anyone who worked or works in management/corporate at Meijer recently, they will tell you that it looks a lot like Meijer is getting themselves all dressed up for a buyer.

There have been obvious signs for years that they have been looking for a buyer - the buyer being stock holders. Getting ready to go public takes years, and they began the process a long time ago. It is not much of a mystery to those in the business world around here that this has been the plan for some time.

Unfortunately, it is a bit too late for them. If Meijer would have gone public in the 60s or 70s he could literally have been the Wal Mart. What happened in the mean time is that while other companies were stealing his concept and going public he was happy to be a local grocer and act like they would never come knocking. Those other companies amassed huge amount of money from their IPOs allowing them to grow much faster than the private (but still well respected) Meijer.

The fact of the matter is, Meijer missed the big break and they now have an uphill battle. Can they win? It will be hard, but they still are the most innovative in the field and that counts for a lot.

[snoogit]

I hope thoes kids take something away from their father, BY KEEPING IT PRIVATE AND LOCAL!

<{POST_SNAPBACK}>

Don't count on it. Just talking to Hank (fred's #1 son, I saw him at the new Standale meijer, talked to him a bit.) you get the feeling he is reluctantly doing what was given to him. He strikes me as a person who would gladly take the money and run if given te opportunity.

Unfortunately for Grand Rapids, when that day comes, we could be hurt in a major way.

[Rizzo]

Yah, pride would come to mind... Im proud that I can go into a meijer and not into a walmart. Just the fact it being a locally owned company makes me prouder.

[snoogit]

Yah, pride would come to mind... Im proud that I can go into a meijer and not into a walmart. Just the fact it being a locally owned company makes me prouder.

<{POST_SNAPBACK}>

Meijer at least has the pride not to sell to walmart, beside walmart doesnt have a history of purchasing companies, only crushing their competition.

If Meijer sells it will be similar to the sears-kmart merger.

[joeDowntown]

And there is no telling whether they will be the merger or the mergee (if that is a word). Look at the coup little shrinking K-Mart pulled on Sears. Of course you put two crappy companies together and it is still crap. Alas, I still think Meijer has legs and a lot of people (myself included) would not shop at Walmart for the life of me. I see Target being their biggest competition because they both play the "don't be ashamed to buy it at..." game.

Meijer at least has the pride not to sell to walmart, beside walmart doesnt have a history of purchasing companies, only crushing their competition.

If Meijer sells it will be similar to the sears-kmart merger.

<{POST_SNAPBACK}>

[egrguy]

looks like i stand corrected about no press of meijer selling. however, there has been articles referencing an urge to expand westward by building a new distro center in chicagoland allowing new stores in wisconsin, iowa, minnesota and missouri.

with the changing of the guard at meijer, it looks to me like meijer could be the aggressor on the market and by going public they could raise capital to do so. plus, with so much investment in their brand, selling to another company wouldnt make much sense just to see it whitewashed by that company's moniker.

with approx 12b in revenue its a small fry compared to wal-mart, target, etc... and i am unsure of other regional supermartkets that meijer could scoop up. any ideas?

and yes, if meijer was the first to go public, it would be on the size of at least target and potentially target. sigh... it would be nice if GR had the largest co in the world.

[joeDowntown]

jdkacz,

I think Meijer would have to go it alone. I don't think there are many independents that could be converted into Meijer's. The format are just so dissimilar. I think the best thing Meijer can do is build their stores right next to Walmart and see what happens. The atmosphere of Meijer is much less chaotic and prices aren't THAT different.

I actually heard an interesting comment from Walmart this week. Their target market is for people who live paycheck to paycheck. A good niche, but I think Target or Meijer could clobber them with their nicer stores, great groceries and overall better atmosphere. Walmart emulates Meijer whenever they can, and that to me shows that Meijer may be smaller but for every Goliath there is a David.

Joe

looks like i stand corrected about no press of meijer selling. however, there has been articles referencing an urge to expand westward by building a new distro center in chicagoland allowing new stores in wisconsin, iowa, minnesota and missouri.

with the changing of the guard at meijer, it looks to me like meijer could be the aggressor on the market and by going public they could raise capital to do so. plus, with so much investment in their brand, selling to another company wouldnt make much sense just to see it whitewashed by that company's moniker.

with approx 12b in revenue its a small fry compared to wal-mart, target, etc... and i am unsure of other regional supermartkets that meijer could scoop up. any ideas?

and yes, if meijer was the first to go public, it would be on the size of at least target and potentially target. sigh... it would be nice if GR had the largest co in the world.

<{POST_SNAPBACK}>

[superNOVA]

The market is too fracture at the bottom, sparse in the middle, and dominated at the top. Meijer would compare closely with Target, and they need to keep pushing out. Wal Mart may have hit the brick wall in terms of brand growth and geographical growth. At some point, their stores will begin to implode - ask Sears or K-Mart (who essentially did the same thing that Wal Mart has done in a different era). As competition arises to Wal Mart also expect major brands to take a stand against their cost (profit) cutting foe and pick sides against Wal Mart when possible.

The point is. There are not too many suiters for Meijer and there are not too many great acquisition targets. Wal Mart cannot buy them without risking the wrath of the Justice department. Target probably cannot afford them, and well with Sears and K-Mart pretty much getting out of the game there are not many options. Most of the regional grocers are on a level lower than the larger super store chains.

[snoogit]

The point is.  There are not too many suiters for Meijer and there are not too many great acquisition targets.  Wal Mart cannot buy them without risking the wrath of the Justice department.  Target probably cannot afford them, and well with Sears and K-Mart pretty much getting out of the game there are not many options.  Most of the regional grocers are on a level lower than the larger super store chains.

<{POST_SNAPBACK}>

The only real good suitor for Meijer is May Department Stores Inc (owners of Marshall Fields, who used to be owned by Target)

[egrguy]

in a sense that kinda makes sense. stores that cater to the upper class have a much higher profit margin. why not a high class supercenter? nonetheless, i believe that the meijer brand is quite solid and for many companies that are already in the midwest they would be buying meijer just to eliminate the competition. so if meijer does go public, i believe they will be on their own.

on a side note, farmer jacks is getting sold off due to weak sales over on the east side of the state.

[Rizzo]

Looks like the guy might not see the billions that I hoped. I heard that the oil man may sell out some plots.

[superNOVA]

Well he is not going to give them away. If there is value in the plot - he will still get a fortune for it.

[Rizzo]

I just read the article on skyscraperpage.com and I guess if he does stand to sell plots he still is raking in huge cashmoney.

[joeDowntown]

It sounds like it is one of the largest oil find in US History. Whether he pumps oil himself or sells it to some good ole boys down in Texas, he stands to walk away with enough money to buy J.R. Ewing 10 times over.

He is very active at Calvin College, I'm sure there will be a couple building with his name on their campus within the next ten years.

Joe

I just read the article on skyscraperpage.com and I guess if he does stand to sell plots he still is raking in huge cashmoney.

<{POST_SNAPBACK}>

[Rizzo]

I hope he makes a stand and puts money in GRPS. Maybe a public hotel...

[ModSquad]

I cannot say too much because of conficentiality, but I know members of the Jansma family and they are GREAT people, very committed to Grand Rapids, very committed to the central city. If all that is projected in the paper comes to pass with Wolverine Oil, we can anticipate great things from the Jansma family.

[egrguy]

i really agree with rizzo. for all the amazing benefactors the city has, if only grps would have a strong ally that could improve the quality of life within the city tenfold. a strong school system is essential for the city's longterm health.

but, seeing that the oilman is a calvin man, i dont see if he has any strong ties to the grps system, although i could be wrong and would be gladly corrected if he decided to invest within the city's schools.

[joeDowntown]

I view the GRPS system like a person with an alcohol problem. They can't fully be saved until they admit that serious changes need to be made. Privatization of services is one step (if it saves money), but I think before philanthropists get involved, they need to see the train get back on the tracks. It's a multi-faceted problem. Millages never get passed because people a) don't care, B) are uninformed or c) do not own the property they live in. I personally think they should bust up the school district (which probably sounds crazy to many). If you look at many of the schools, they would do fine on their own but there is a giant sucking sound coming from a few of the schools. If the stable schools were able to work with their own budgets, programs, etc. I think we could figure out which schools truly need help and really focus efforts on improving those schools. Right now there is a perception that all GR schools suck. I don't think that is a fair assessment, but the weaker schools pull down the whole district.

It is such a big problem, I personally wouldn't touch it with a 39 1/2 foot pole.

Joe

i really agree with rizzo. for all the amazing benefactors the city has, if only grps would have a strong ally that could improve the quality of life within the city tenfold. a strong school system is essential for the city's longterm health.

but, seeing that the oilman is a calvin man, i dont see if he has any strong ties to the grps system, although i could be wrong and would be gladly corrected if he decided to invest within the city's schools.

<{POST_SNAPBACK}>

[Rizzo]

I still think a good person would help all God's children no matter the condition of the school. The system may have its problems, why should that be the ultimate deciding factor for giving money that would directly benefit the children anyway...

[Rizzo]

Public pools...

[dnast]

I think its more about making sure their money isn't going to waste (from the administrative side, not the kids').

[Rizzo]

true, I should say, when used responsibly the money will benefit the kids.

[jetstream]

The funniest part - from what I gather this company is owned by a single guy.  He is situated to pretty much take a jump to the top of the worlds richest list over the next decade or two.  Think of him being able to buy DeVos and VanAndel five to ten times over.  Damn near as rich as Bill Gates is at the moment.

That is a lot of cash, and that is also under the assumption that prices will remain the same - odds are they will increase as fast or faster than inflation.  I am guessing if there are one billion barrels minus the 12% state and fed cut he is looking at from between $30 billion and $80 billion.

That is a lot of money.  The best news - he is the West Michigan type.  Very religious (reminds me of a few other rich people), giving, and most likely happy with where he is and his community ties.  I think the local area will see a lot of this money over the next few decades.

*****  Better yet - they are HQ'ed downtown.

<{POST_SNAPBACK}>

Wolverine Gas and Oil is the operator of the Utah lease but there are a total of 14 investors; 10 of which are Western and Central MI companies.

They can drill wells for the next ten years straight and still not get all of the oil out (assuming the discovery is as good as the current hype) so while they certainly own a piece of a valuable asset they are not among the worlds richest.

There are companies out west currently paying between 250,000 and 500,000 to get a drilling rig delivered so you cant forget expenses involved with oil production.