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Albertsons’ big dividend payment sees new delay

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Acquiring Albertsons
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A big dividend to Albertsons Companies shareholders won’t happen this month.

The company hopes to dole out a dividend payment worth $4-billion, and said it would pay it out earlier this month. But two groups of state attorneys general sued to stop the payment. While one effort wasn’t initially successful, another, in Washington State, has so far stymied the payout.

Washington Attorney General Bob Ferguson sued, saying the dividend would hurt Albetsons’ ability to continue business and “sabotage their ability to compete while the merger is under review.”

A court in the state agreed to a temporary restraining order that blocked the payment. It initially set a hearing for November 10th, but later pushed it back to November 17th. Now, the court has postponed the hearing again, until December 9th. While the restraining order is in place, Albertsons can’t pay out the dividend.

“Albertsons Cos. continues to believe that the claim brought by the State of Washington is meritless and provides 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 company said in a statement.

Albertsons agreed to be acquired by Kroger Co., and both companies said the dividend payment was “in connection with” the merger. After a letter from several states attorneys general, Albertsons said the dividend payout was part of a “long-stated capital-return strategy.”

Ferguson argues that halting the dividend payment will give his state the ability to review and investigate the merger. Albertsons and Kroger would have a strong market share in the state, including roughly 40% in the Seattle metro.

Don Day - BoiseDev Editor & Founder
Don Day - BoiseDev Editor & Founder
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at [email protected].

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