A court said Albertsons could give $4B to shareholders.
Over 2½ months after a temporary restraining order prevented Albertsons from issuing a $4 billion payout to its shareholders, the Boise-based grocery retailer can finally move ahead with the payment.
The temporary restraining order was lifted on Tuesday. The order was placed upon Albertsons in November after Washington state Attorney General Bob Ferguson sued Albertsons and Kroger amid the two companies’ proposed merger.
Albertsons planned to pay shareholders $6.85 per share ahead of the merger, but Ferguson argued that the payout would “weaken” Albertsons’ ability to continue business operations and compete.
The order was extended multiple times. Ferguson wanted state and federal antitrust regulators to review the merger thoroughly and determine if Albertsons could continue to compete following the payout. The was most recently extended on Dec. 21.
But on Tuesday, the Washington Supreme Court denied a motion from Ferguson to hear an appeal after a lower court denied his request to prohibit the payment.
Albertsons told McClatchy News in November that Ferguson’s case “provides no legal basis for canceling or postponing a dividend.”
Albertsons announced on Tuesday that it would begin paying the special dividend immediately
Cerberus Capital Management, a New York private equity firm, has the most to gain from the payment. The firm leads a group of investment companies that acquired part of the former Albertsons Inc. in 2006. Although Albertsons has been trading publicly since June 2020, Cerberus holds roughly 30% of Albertsons’ shares.
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.
“Albertsons Cos.’ proposed merger with The Kroger Co. is continuing through required regulatory review,” Albertsons said in a news release, “including seeking clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.”
The Hart-Scott-Rodino Antitrust Act requires parties engaging in large transactions to report business to the Federal Trade Commission and the U.S. Department of Justice’s Antitrust Division for antitrust review. The merger between Albertsons and Kroger is worth an estimated $24.6 billion.
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