That assertion surprises some observers. Simon Raggett, an analyst for Williams de Broe in London, remarked, "How is it that new information has suddenly emerged" when the deals in question were struck years ago?

Raggett and other analysts can only guess that Ahold did not win sufficient voting rights when acquiring large equity stakes in the three companies (50 percent in the cases of Disco and ICA, 49 percent in that of Jeronimo) to assert true control. But that assumption only raises more questions about Ahold's once-vaunted ability to make and manage acquisitions. And given Ahold's perceived lack of credibility, the absence of a better explanation, says Raggett, is "pretty troubling."

Troubling indeed. Royal Ahold took on heavy debt to finance the growth of U.S. Foodservice and now must convince bankers and bond investors that its operations are worth keeping alive. Raggett, for one, believes the company can do so on the strength of its retail operations in the United States and the Netherlands. He thinks the assets will have to be sold for lenders to realize any value from them, however.

In our April 2001 article, some observers suggested that Ahold would have to keep acquiring companies lest it be acquired. Now it appears that the Dutch grocer is ripe for the picking.

The price would be right, that's for sure. Since last week's stunning announcement, Royal Ahold's market capitalization has shrunk by about 66 percent.

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