Washington Attorney General Bob Ferguson has filed a lawsuit to stop the proposed merger between Albertsons and Kroger until the deal can be scrutinized.
On October 14th the two supermarket chains announced they had agreed to merge in a $24.6 billion deal, with Kroger buying all of Albertsons’ outstanding stock. The merger agreement included a special dividend of up to $4 billion that Boise-based Albertsons would pay to its shareholders on November 7th.
The lawsuit comes after a bipartisan group of six attorney generals from around the country, including Idaho Attorney General Lawrence Wasden, sent a letter to Albertsons urging the company to delay paying the special dividend until after the merger had been thoroughly reviewed.
According the Washington State Office of the Attorney General, which has viewed filings with the Securities and Exchange Commission, the $4 billion dividend exceeds Albertsons’ cash on hand, which they say could affect the grocer’s inventory and worker hours.
Ferguson sued in King County Superior Court in Seattle. He also filed a request for a temporary restraining order to block Albertsons from making the dividend payment while the lawsuit is pending.
The Washington State Office of the Attorney General expects a hearing on the temporary restraining order sometime this week. (Idaho Statesman)
