Fri, Nov 4, 2022 2:42 PM
By Brett Davis, The Center Square
King County Superior Court Commissioner Henry Judson approved a motion granting a temporary restraining order blocking Albertsons from making a $4 billion dividend payment to investors as part of a planned nearly $25 billion merger with the Kroger Company.
Washington State Attorney General Bob Ferguson sued on Tuesday to stop the payment – which was scheduled for Nov. 7 – while Albertsons’ merger with Kroger is under review. In the lawsuit, Ferguson claims the payout could jeopardize the grocery giant’s ability to do business and imperil jobs.
In his Thursday ruling, Hudson noted Albertsons’ would use 75% of its cash on hand and borrow $1.5 billion to make the payout. The judge found that having such a low cash reserve would be detrimental to the grocer’s operations.
Ferguson celebrated the ruling in a statement put out by his office.
“Huge victory!” he said. “Putting the brakes on this $4 billion payment is the right thing for Americans shopping at their local grocery store. Thanks to my team for their usual excellent job holding powerful interests accountable.”
Boise, Idaho-based Albertsons, which owns Safeway, and Cincinnati, Ohio-based Kroger, which owns QFC and Federal Way, are among the biggest grocers in Washington.
The next hearing in the case is set for Nov. 10.
Ferguson and six other attorneys general had expressed concerns in a letter to Albertsons, urging the grocery giant to delay the dividend payment.
Albertsons’ rejected the request in a letter of its own, prompting Ferguson’s lawsuit.