Safeway Reaches Agreement with Shareholders Over Albertsons Merger

By Frazer Jones
In March, Albertsons LLC (owned by parent company Cerberus Capital Management) announced that it would be merging with supermarket competitor Safeway, a...

In March, Albertsons LLC (owned by parent company Cerberus Capital Management) announced that it would be merging with supermarket competitor Safeway, acquiring all outstanding shares at a rate of $32.50 cash plus stock in gift card subsidiary Blackhawk Network Holding for $3.95 per share to Safeway shareholders. The acquisition also included a stipulation for the monetization of Safeway’s 49 percent equity interest in Mexico-based retailer Casa Ley, S.A. de C.V. – but the exact terms of this proved to be a sticking point with some shareholders, who filed suit against the merger.

This week, Safeway and its opposing shareholders reached an agreement that will allow the merger to move forward as planned. According to reports, the settlement reached between Safeway and shareholders means that the brand must now sell off its equity interest in Casa Ley by 2017, a year earlier than the terms originally agreed to in the merger. Originally, shareholders would receive no benefit from any unsold equity in the retail brand – now, shareholders are to receive the fair market value of any Casa Ley equity that remains unsold by the deadline.

In a statement to the press, Safeway still called the shareholder challenge “entirely without merit.” Nonetheless, it was important to settle the issue as soon as possible, rather than letting it drag out in court. Albertson’s and Safeway are both looking forward to the success of this acquisition – Albertsons is paying roughly $9.2 billion for the deal, and Safeway’s board of directors approved the deal unanimously. So whether the lawsuit was with merit or not, being able to put it behind them and move forward with the business of merging strategies and planning for the future is valuable in and of itself.   

 

[SOURCE: http://www.bloomberg.com/news/2014-06-16/safeway-settles-lawsuits-over-9-2-billion-cerberus-buyout-1-.html; http://supermarketnews.com/retail-financial/safeway-settles-merger-dispute]

Share

Featured Articles

Diageo Trials new Baileys Paper-Based Bottle

Diageo trials a dry moulded fibre bottle made of 90% paper by partnering with PA Consulting, as part of the Bottle Collective with PA and PulPac.

Unilever CEO Schumacher Lays out Plastics Roadmap

Unilever CEO Hein Schumacher sets out a roadmap to a Global Plastics Treaty, in wake of controversy that saw company criticised for watering down ESG goals

Ahold Delhaize Targets Sustainability & Omnichannel Goals

Multinational food business Ahold Delhaize prioritises sustainability and omnichannel innovation as part of its new plan for financial and strategic goals

US Bird flu Turns Spotlight on Milk Pasteurisation

Drink

Nestlé 'Meeting Sustainability Targets on Nescafé Coffee'

Sustainability

Coffee Prices Soar as Extreme Weather Hits Brazil & Vietnam

Drink