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Albertsons set to pay big dividend after Washington Supreme Court declines to hear case

Acquiring Albertsons
BoiseDev complete coverage

Acquiring Albertsons
BoiseDev complete coverage

The Washington Supreme Court decided not to hear a claim from the state’s attorney general against Boise-based Albertsons’ plan to issue a large dividend to its private equity owners and other shareholders.

The decision allows the grocery giant to pay $6.85 per share to each shareholder on record as of October 24th of last year. The company had hoped to make the payment in November, but the Washington AG sued and won a temporary restraining order, which was extended several times. That has now been lifted, and Albertsons said it plans to pay the dividend “as soon as practicable” but didn’t give a firm date.

The company and Kroger Co. initially said the large dividend payment was in connection with Kroger’s proposed acquisition of Albertsons. Albertsons later changed course and said the payment was part of a long-term capital return strategy and unrelated to the acquisition.

‘Far from a done deal’

Washington AG Tom Ferguson said his office’s work on the Albertsons deal isn’t finished.

“The issues raised in our legal challenge are important to grocery workers and hardworking Washingtonians who must access affordable groceries to feed themselves and their families,” Ferguson said. “We respect the decision of the court, but we are surprised and disappointed the supreme court decided not to hear this case. That said, I want to be clear: This merger is far from a done deal. My team and I will be conducting a thorough review.”

Cincinnati-based Kroger announced in October it hoped to purchase Albertsons in a $24.6 billion acquisition that could close in 2024. The deal brought quick blowback, including two states’ AG lawsuits, a bipartisan grilling by congress, and complaints from unions. The agreement came after another company initially said it would pay more for Albertsons but changed its mind and backed out.

The companies say the acquisition will allow them to better compete with large chains like Walmart and online sellers like Amazon.

The company will need sign-off from the Federal Trade Commission, which has taken an increasingly aggressive posture towards larger mergers. The FTC is already probing the proposed $24.6 billion takeover and made two separate requests for information from both Kroger and Albertsons this month, according to industry publication Grocery Dive.

Last week, the FTC announced it would sue to stop Microsoft’s proposed acquisition of game maker Activision-Blizard. A deal for Penguin Random House to buy Simon & Schuster from Paramount Global fell apart after government scrutiny last month.

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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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