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Albertsons to distribute $4M to Safeway holders
Payment relates to sale of Safeway’s real estate division
2 Min Read
Albertsons Cos. said late Monday that it would distribute $4 million to former Safeway stockholders in connection with its 2015 sale of Safeway’s Property Development Centers subsidiary – an amount less than Safeway shareholders were seeking.
Albertsons sold PDC to Terramar Retail Centers for $830 million in connection with its acquisition with Safeway. The $4 million payment issued Monday relates to Contingent Value Rights (CVRs) issued to Safeway stockholders at the time of the Terramar sale, covering any additional net cash proceeds from the sale of PDC, including amounts released from escrow, additional payments from Terramar and any holdback amounts not spent for potential contingent liabilities.
Safeway in 2015 estimated these amounts would total approximately $18 million net of tax, or 7 cents per share. Albertsons on Monday said its payment would be approximately 4 cents per share.
Safeway and Albertsons previously settled a dispute over the PDC CVRs, agreeing to pay fair market value for shopping center holdings remaining unsold at the end of the two-year sale deadline period.
Safeway’s shareholder representative is seeking to collect additional net proceeds of .0003 cents per CVR, Albertsons added. “[H]owever, the timing and amount, if any, of any future distribution is uncertain and it is possible that no further distribution will be made with respect to the PDC CVR,” the company said.
The announcement has no effect on the CVRs issued in connection with the merger with respect to the sale of Safeway's interest in Mexico-based food and general merchandise retailer Casa Ley. Albertsons said it would provide more information on the PDC CVR and the Casa Ley CVR when it has more clarity on the amount and timing of distributions of them.
T. Gary Rogers, former non-executive chairman of Safeway and the shareholder representative with respect to the PDC CVRs, passed away May 2. Thomas Herman has been appointed to replace Rogers in that position, Albertsons said.
This story has been updated to reflect the accurate additional new proceeds sought by Safeway is .0003 cents per CVR, not 3 cents as originally posted.
