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Two weeks ago, BoiseDev was the first news outlet to report on Boise-based Albertsons Companies’ novel plan to issue a dividend to shareholders “in connection with” – and well in advance of – its upcoming acquisition by Kroger.
But the dividend payment checks likely won’t be going out Monday as planned.
A King County, Washington judge temporarily blocked the payment, approving a motion by that state’s attorney general to stop the dividend until a full review of the case and any possible violation of antitrust laws.
A group of attorneys general, which included Idaho AG Lawrence Wasden, had initially asked the company to stop the payment. When Albertsons declined, two groups sued – though Idaho isn’t a party to either case.
“My team just defeated two powerful corporations in state court,” Washington Attorney General Bob Ferguson wrote on Twitter. “The court blocked a $4 billion dividend payment Albertsons planned to make on Monday. It would have been irreversible. Putting the brakes on this $4 billion payment is a huge win for consumers nationwide.”
Furguson said earlier this week that the dividend would hurt Albetsons’ ability to continue business and “sabotage their ability to compete while the merger is under review.”
Albertsons issued its first public comment on the litigation late Thursday night.
“Albertsons Cos. continues to maintain that the lawsuit brought by the State of Washington, and the similar lawsuit brought by the Attorneys General of California, Illinois, and the District of Columbia are meritless and provide no legal basis for canceling or postponing a dividend that has been duly and unanimously approved by Albertsons Cos.’ fully informed board of directors,” the statement read. “The size of the dividend reflects the company’s strength, rather than the illogical and damaging accusation that it is an attempt to weaken the company.”
Albertsons again said in the release the dividend is part of a “long-stated capital-return strategy,” but the company said in announcing the merger that the dividend payment was connected to the merger, and Kroger said it was “part of” the merger.
The Washington restraining order is in effect until November 10th.