King County judge temporarily blocks $4 billion dividend payment to Albertsons investors

Attorney General Bob Ferguson sued for a stoppage of payments, which his office said would deprive the company of cash it needs to operate and threaten jobs.

KING COUNTY, rinse. – Editor’s Note: The video above about the Albertsons-Kroger merger originally aired on October 31, 2022.

A King County judge issued a temporary injunction preventing the Albertsons from making a $4 billion dividend payment to investors Thursday night.

Washington State Attorney General Bob Ferguson on Tuesday sued to stop the payments while Albertsons’ merger with Kroger Company is under review, saying it could jeopardize the company’s ability to do business. and job threats.

According to Securities & Exchange Commission filings, the $4 billion payout exceeded Albertson’s cash, Ferguson said.

The attorneys general of California, Illinois and the District of Columbia have also sued to stop the payments.

Kroger Company announced plans to acquire Albertsons for $20 billion last month. The deal is expected to close in early 2024 if it is approved by the Federal Trade Commission and the Department of Justice and any court challenges survive.

The merger agreement includes a special dividend of up to $4 billion — or $6.85 per share — that Albertsons had previously scheduled to pay its shareholders on Monday, July 7. November.

A spokesman responded to the lawsuit, calling it “futile” and saying that the dividend payment is not contingent on the Kroger acquisition and will not harm the company’s ability to compete in the market.

“Given our financial strength and positive business outlook, we are confident that we will maintain our solid financial position as we work to close the merger. Additionally. , paying a special dividend will not hinder Albertsons Cos.” our ability to continue to invest in our stores and technology to provide an even better shopping experience while we continue to operate as an independent company and that will not affect our deals. agreements we’ve made with unions representing our associates to increase wages and benefits,” the spokesperson said in part.

The company said it would seek to overturn the ruling as soon as possible.

The attorney general also said that it is unclear whether the deal will pass, because federal and state laws prohibiting mergers significantly reduce competition. Together, the Cincinnati-based Albertsons and Kroger will control about 13% of the US grocery market.

https://www.king5.com/article/money/business/king-county-judge-blocks-albertsons-dividend-payment-investors-4-billion/281-b8cb66c8-3984-44ea-a52d-d7c76a10448a King County judge temporarily blocks $4 billion dividend payment to Albertsons investors

Edmund DeMarche

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