Sen. Warren, others ask Cerberus to halt $4B Albertsons dividend
Mario Tama
Sen. Elizabeth Warren (D-MA), Sen. Bernie Sanders (I-Vt.) and four other lawmakers are asking private equity firm Cerberus to halt the payment of a $4 billion Albertsons (NYSE:ACI) dividend connected to its deal with Kroger (NYSE:KR).
"The proposed Kroger-Albertsons merger would result in a multi-billion dollar windfall for your firm, leaving consumers and workers to pay the price," Sanders and the other lawmakers wrote in a Thursday letter to Cerberus co-CEOS Steve Feinberg and Frank Bruno. "The $4 billion dividend payout to your company and to other shareholders represents an immediate threat."
The Warren letter comes as a Washington state judge on Thursday granted a temporary restraining order blocking payment of Albertsons (ACI) dividend. The next hearing on a potential preliminary injunction is set for Nov. 10 in Washington state.
Albertsons (ACI) shares rose 2.3% after the news in Washington state.
Multiple state attorneys general have filed a joint suit against Albertsons (ACI) to block the dividend payment. Washington D.C., California, Illinois attorneys general jointly announced Wednesday they have sued the grocery chain on the grounds that it would hurt union employees, consumers, and the ability of the company to operate with a lower cash balance.
Warren last month called for the Federal Trade Commission to block Kroger's (KR) planned $25 billion acquisition of rival supermarket chain Albertsons (ACI).
Albertsons (ACI) said in a statement late Thursday that it plans to seek to overturn the TRO "as quickly as possible because the temporary order was based on the incorrect assertion that payment of the special dividend would impair its ability to compete" while its proposed deal with Kroger is under an antitrust review.
Albertsons "intends to argue vigorously based on the factual record that there is simply no basis to continue restraining the payment of the special dividend," the supermarket chain said in the statement.