Home Business Washington court temporarily blocks Albertsons’ $4 bln dividend payment

Washington court temporarily blocks Albertsons’ $4 bln dividend payment

2 min read
Comments Off on Washington court temporarily blocks Albertsons’ $4 bln dividend payment

Article content

Washington’s King County court has granted a nationwide temporary restraining order, blocking grocery chain Albertsons Companies Inc’s $4 billion dividend payment, State Attorney General Bob Ferguson tweeted on Thursday.

“We’ll be back in court Nov. 10 seeking an injunction to keep the dividend on hold while our lawsuit continues,” Ferguson said in a tweet.

Article content

Supermarket operator Kroger Co snapped up Albertsons in a $25 billion deal last month, to better compete against U.S. grocery industry leader Walmart Inc on prices.

Article content

As part of the deal, Albertsons announced a payout of a “special cash dividend” of up to $4 billion to its shareholders, funded by $2.5 billion in cash on hand and borrowing the rest, with a payment date of Nov. 7.

Ferguson filed a lawsuit on Tuesday to block Albertsons from paying dividends to shareholders before closure of its proposed merger with Kroger.

The attorneys general of Washington D.C., California and Illinois also filed a lawsuit on Wednesday in a federal court seeking to block the dividend payment alleging that the proposed dividend was in violation of federal and state antitrust laws by rendering Albertsons less able to compete effectively with other supermarkets.

They also raised concerns that it would make the retailer strapped for cash after the payout, adding that it would hamper the company’s ability to price competitively and maintain staffing and staff wages and benefits.

Albertsons did not immediately respond to a Reuters request for comment. (Reporting by Rhea Binoy in Bengaluru; Editing by Rashmi Aich)

Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

Bristol Palin Undergoes 9th Breast Surgery to Fix ‘Botched’ Reduction

Getty Images Bristol Palin is recovering from her ninth breast reconstruction surgery. The…