Albertsons’ $4 billion in payouts set for another delay. Here are the details
Albertsons’ shareholders are in for a much longer wait to get their $4 billion in dividend payments, after a temporary restraining order that halted the payouts has been extended through February.
The temporary order will remain in effect until Feb. 9. The order was initially approved just three days before the payout was scheduled, and has since been extended on multiple occasions.
Washington Attorney General Bob Ferguson sued Albertsons and Kroger in November and aimed to block Albertsons, a Boise-based grocery retailer, from the payout until state and federal antitrust regulators had reviewed the company’s proposed merger with Kroger, a larger competitor.
Ferguson filed the temporary restraining order because he said he believed the payout would “weaken” Albertsons’ ability to continue business operations and compete. Albertsons told McClatchy News that Ferguson’s case was “meritless.”
The extension into February is the most lengthy to date as the Washington Supreme Court reviews Ferguson’s case. The Washington Supreme Court is sitting en banc, a special procedure when all court judges hear a case.
Albertsons announced on Wednesday in a news release that it has filed a motion to expedite the Washington Supreme Court’s review. But until the justices have thoroughly reviewed the case, Albertsons cannot pay its shareholders.
Albertsons celebrates other favorable rulings
The special dividend payout was a stipulation in the $24.6 billion merger between Albertsons and Kroger, in which Albertsons would pay $6.85 per share to shareholders.
A large chunk of that payment would go to 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.
But Albertsons did enjoy one victory earlier this week.
A U.S. Circuit Court on Tuesday denied an injunction pending appeal and administrative stay of the special dividend payment — appeals that would have delayed the payment. Appeals for a temporary restraining order from several attorneys general were rejected on Nov. 8.
“Albertsons Cos. continues to maintain that the claim brought by the attorney general of the State of Washington, and the similar lawsuit brought by the attorneys general of California, Illinois, and the District of Columbia, are meritless and provide no legal basis for preventing the payment of the special dividend,” Albertsons said in a statement.
“Albertsons’ position has been supported by favorable rulings in both Circuit and District courts in the District of Columbia and a Washington state court,” the statement continued.
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.
