Albertsons Shareholders to Receive $4 Billion Dividend

Albertsons has a 0.22% ACI.

Albertsons has finally been able to pay its shareholders a $4 billion dividend after months of opposition from attorneys general who attempted to prevent the merger between the supermarket operator and Kroger Co. KR 0.33%.

Albertsons, a company based in Boise, Idaho, announced that a dividend will be distributed to shareholders on Friday, October 24, 2022, who owned the stock at the end of the day.

This week, the Washington Supreme Court cleared the way for the payout by denying an appeal from the state's attorney general. In November, the attorney general had filed a lawsuit in an attempt to prevent the payout, arguing that it would put Albertsons at a disadvantage compared to Kroger and other retailers if the merger did not go through.

Albertsons has declared that the dividend is not dependent on the merger and that it would still have $3 billion of liquidity after the payment. The grocery store stated that it planned to give back capital to shareholders with or without the merger, and that it would not be at a disadvantage compared to other companies after taking on $1.5 billion of debt for the dividend.

Albertsons chose not to make any additional remarks. Washington Attorney General Bob Ferguson declared this week that the merger is far from finalized, and that his team will be conducting a comprehensive examination.

The Attorney General of Washington took action after the King County Superior Court ruled in favor of the companies in December. This week, the temporary restraining order that had blocked the payment was lifted.

Kroger's proposed $20 billion purchase of Albertsons has been met with resistance from elected officials, labor organizations, and some independent retailers due to concerns about the potential effects on food prices, job security, and competition. The two companies have argued that the merger would give them a larger presence in the country and enable them to better compete with larger competitors.

Attorneys general from California, Illinois, and Washington, D.C. asked for a temporary restraining order to stop a payment, but the U.S. District Court for the District of Columbia refused the request.

The California attorney general has stated that his team is currently assessing what their next steps should be in regards to the payment. Neither the Illinois nor Washington, D.C. attorneys general have made any remarks on the matter.

In November, Kroger and Albertsons submitted paperwork to the Federal Trade Commission in regards to their merger. Kroger has reported that the FTC requested additional information, which is a common occurrence in large mergers.

Albertsons recently revealed more information about the agreement with Kroger. The filing stated that prior to the deal, Albertsons looked into a minority investment, selling some real estate, and selling the company as part of its review of potential options. Additionally, Albertsons considered capital-return alternatives such as a special dividend and a tender offer.