The Seattle Times reports that “Albertsons’ investors hoping for their share of a promised $4 billion payment must wait at least another week for a payout bound up in a controversial merger with rival Kroger.
“On Thursday, King County Superior Court Judge Ken Schubert extended through Nov. 17 a week-old restraining order on the payment. Schubert added the extra week in part so state lawyers could better prepare their claim that the payment would weaken Albertsons and potentially void the nearly $25 billion merger, which was announced last month.”
At the hearing, the Times reports, “Schubert pushed Albertsons and Kroger to share more information about the connection between the dividend and the merger, which would unite two of America’s largest grocery retailers … Schubert also wants the companies to fully comply with the state’s request for board minutes and other internal communications about the impact of the dividend.”
Earlier this week, a US federal court judge refused to temporarily block the $4 billion dividend payment, rejecting arguments made by the attorneys general of California, Illinois and Washington D.C who sought to block the payout until antitrust reviews of the proposed merger were completed.
However, the Washington Post reports that the Oregon attorney general’s office also has “sent a letter to Albertsons requesting documents regarding the merger proposal and a related move to take $4 billion out of Albertsons and return it to shareholder … The attorney general’s office ‘intends to fully investigate all the conduct of individuals and entities involved in negotiation and determining the ‘special dividend’.'”
KC’s View:
FYI … I keep hearing people in the media talking about these efforts to challenge the dividend payment as being tantamount to blocking the Kroger-Albertsons merger. I don’t think that’s accurate. Even if the dividend payment is successfully blocked – and my semi-educated guess is that it won’t be – I don’t think it derails the merger. There will be additional challenges to the deal that will come through litigation, legislation and regulation, but we’re a long way from the deal being stopped.
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