LUBBOCK, Texas — According to the Seattle Times and other news outlets, a judge in King County, Washington put a $4 billion dividend payment on hold related to the sale of United Family’s parent company.
Albertson’s, which operates Lubbock-based United Supermarkets, Market Street, Amigos and United Express, announced a $24.6 billion deal with Kroger on October 14.
The State of Washington sued to stop the deal.
The lawsuit said, “Although Albertsons is a publicly traded company, approximately 75% of its stock is controlled by a private equity consortium. As a result, paying out $4 billion will mostly benefit this private equity consortium, which controls Albertsons.”
The money is to be paid regardless of whether deal goes through.
“Paying out the $4 billion will cripple Albertsons’ ability to operate its stores and meaningfully compete with Kroger during the time before the deal closes and leave it in a weakened state if the deal subsequently falls apart,” the lawsuit also said.
The delay of the $4 billion dividend is for one week while the courts continue to examine the issue.
Albertsons and Kroger already announced certain locations would need to be sold in order to meet regulatory standards for approval. Those locations, experts previously said, are on the West Coast of the United States.
United Family did not comment publicly on the proposed merger to this point.
According to the Seattle Times, in a statement late Thursday, Albertsons said it “intends to seek to overturn the restraint 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 …”