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Washington State’s Attorney General Sues Albertsons To Stop $4B Pre-Merger Payout

By  |  November 2, 2022

Washington State Attorney General Bob Ferguson filed a lawsuit on Tuesday to block grocery chain Albertsons from paying dividends to shareholders before closure of its proposed merger with supermarket operator Kroger.

Cerberus invested just $100 million for control of Albertsons in 2013, later taking it public in 2020 at a $9.3 billion market cap (not including around $8.5 billion in debt). Albertsons recently agreed to be acquired by rival Kroger at more than double the $16 per share IPO price.

Related: $25B Kroger-Albertsons Merger Deal Could Close 400 Stores

Cerberus currently holds a 28.37% stake in Albertsons, worth around $5.18 billion via the Kroger deal. It also has two of the company’s 11 board seats, including a co-chair.
But it’s in line to get more than $1 billion of that total next week, via a special dividend that was announced at the exact same time as the Kroger merger. That money, or set to be paid out next week, and wouldn’t be clawed back if the Kroger merger is blocked by antitrust regulators or otherwise doesn’t close.