US State AGs Call For Special Dividend For Kroger Mega-Deal

A bipartisan group of state attorneys general is calling for a special dividend being paid to Albertson holders in connection with the supermarket chain’s planned sale to Kroger be stopped, as part of the ongoing challenge to a merger that some fear would create local monopolies in several US regions.

“We are deeply concerned about the deal,” Washington DC Attorney General Karl Racine told CNBC in an interview. “We are specifically concerned about this deal because with the announced merger was a significant nearly $4 billion special dividend announcement, which could be valid or could amount to a massive improper giveaway to certain shareholders.”

Read also: US Senate Panel To Hold Antitrust Hearing On Kroger’s Albertsons Buy

Racine said he’s asking “nicely” in a letter to stop the payment of the special dividend, though all options are on the table. He said the option of a potential legal block to payment of the special dividend is still considered a possibility.

Albertsons agreed to pay a special dividend of up to $4B, or $6.85/share, to its shareholders in accordance with the terms to be paid on Nov. 7 in connection with its planned $25 billion sale to Kroger (KR).

The plea from the state attorney generals comes after Sen. Elizabeth Warren (D-MA) last week called for the Federal Trade Commission to block the transaction.