Albertsons’ big payout to shareholders was halted until this week. What just happened
The wait continues for Albertsons and its plan to make a $4 billion special dividend payout to its shareholders.
A temporary restraining order regarding the payout, which was placed on the Boise-based grocery retailer last week amid the company’s $24.6 billion merger with Kroger, has been extended through Nov. 17, Albertsons announced on Thursday.
Part of the merger between Albertsons and Kroger included a payout of $6.85 per share to Albertsons shareholders by Monday, Nov. 7.
Washington State Attorney General Bob Ferguson sued Albertsons and Kroger on Nov. 1 to block the special dividend payment until state and federal antitrust regulators thoroughly reviewed the merger.
A state judge approved the temporary restraining order after a request from Ferguson, who argued that making the payment before regulators could review the merger would “weaken Albertsons’ ability to continue business operations and compete.”
The order was set to expire on Thursday, Nov. 10, when a hearing was scheduled to consider the lawsuit’s merits. But that hearing has now been postponed to Nov. 16 and 17, and along with it, the extension of the order
“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,” Albertsons said in a statement Thursday.
Albertsons has sold stock publicly since June 2020 but remains controlled by Cerberus Capital Management, a New York private equity firm that leads a group of investment companies that first acquired part of the former Albertsons Inc. in 2006. Cerberus still holds roughly 30% of Albertsons’ shares and would collect a large share of the special dividend.
But Albertsons did pick up a win earlier this week.
A separate request for a temporary restraining order was filed by the attorney generals of California, Illinois and the District of Columbia. That request was denied by the U.S. District Court for the District of Columbia on Tuesday, Nov. 8.
According to Albertsons, even after making the special dividend payment, the company would have about $3 billion of liquidity, $500 million in cash and $2.5 billion available under its asset-based lending facility.
Albertsons is Idaho’s largest company and a Boise icon, with 290,000 employees nationwide and more than 5,000 employees in Idaho, McClatchy News previously reported.
This story was originally published November 11, 2022 at 1:22 PM with the headline "Albertsons’ big payout to shareholders was halted until this week. What just happened."
