Albertsons shareholders came another step closer to receiving a special dividend payment of $6.85 per share, or about $4 billion, after the State of Washington Supreme Court agreed to expedite a review of the payment to Jan. 17.
The court previously had set a Feb. 9 deadline for the review, which is taking place following Washington State Attorney General Bob Ferguson’s appeal of a lower state court decision that would have allowed the payment to take place.
Albertsons last month had requested an expedited review of the payment, which remains blocked by a temporary restraining order.
Boise, Idaho-based Albertsons announced the special dividend at the same time it announced its planned $24.6 billion merger with Cincinnati-based Kroger Co., which is scheduled to close in 2024. Albertsons 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.
Ferguson on Nov. 1 sued to halt the -dividend payment, which had been planned for Nov. 7, arguing that it would weaken Albertsons’ ability to compete, particularly against Kroger, and that it would violate antitrust law and the Consumer Protection Act. The two companies have extensive store overlap in Washington and other markets and are expected to spin off hundreds of stores to satisfy antitrust concerns.
“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.”
In a separate suit seeking to block the dividend payment, Albertsons said that the U.S. Circuit Court for the District of Columbia denied a motion filed by the attorneys general of California, Illinois and the District of Columbia seeking an injunction against the payout to shareholders.
A spokesperson for California Attorney General Rob Bonta’s office last month said his office “will continue to review the proposed merger … to ensure it does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects.”
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.
The United Food and Commercial Workers union has also spoken out against both the dividend payment and the Albertsons-Kroger merger, arguing that the money could be better invested in Albertsons’ stores and that the merger will result in store closures and lost jobs.