Albertsons said the State of Washington Supreme Court set a date of Feb. 9, 2023, for a review of the Washington State Attorney General’s appeal seeking to block the Company’s $4 billion dividend payment to shareholders.
In a statement, the Boise, Idaho-based supermarket chain also said that the U.S. Circuit Court for the District of Columbia this week denied a motion filed by the attorneys general of California, Illinois and the District of Columbia seeking an injunction against payment of the dividend.
As previously reported, Albertsons announced the special dividend of $6.85 per share at the same time it announced its planned $24.6 billion merger with Cincinnati-based Kroger Co., which is scheduled to close in 2024. The company said it will fund the dividend with $2.5 billion of its $3 billion cash on hand, plus $1.5 billion funded by its line of credit.
Washington State Attorney General Bob Ferguson on Nov. 1 sued to halt the proposed dividend, arguing that it would weaken the company and that it would violate antitrust law and the Consumer Protection Act. After a state superior court ruled that the dividend payment could go forward, Ferguson appealed to the state Supreme Court and requested an emergency extension of the temporary restraining order blocking the payment, which was granted last week.
“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 company said it has filed a motion to expedite the sc heduled Feb. 9 review by the state of Washington Supreme Court.
A spokesperson for California Attorney General Rob Bonta’s office said it was disappointed in the U.S. Circuit Court’s decision to allow the dividend payment.
“We will continue to review the proposed merger between the companies to ensure it does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects,” Bonta’s press office said in a statement provided to SN.
Representatives from the attorney generals of Illinois and the District of Columbia could not be reached for comment.
Colorado Attorney General Phil Weiser, who filed an amicus brief in support of Washington State in its suit to block the dividend, is also leading a multistate investigation into the merger.
