Safeway real estate unit sold for $830M

Safeway said it has completed the sale of its real estate development assets to Terramar Retail Centers.

The assets, owned by Safeway’s wholly owned subsidiary Property Development Centers, sold for approximately $830 million, subject to certain adjustments.

The estimated total cash payment to Safeway stockholders for PDC is $2.45 per share, of which $2.38 is estimated to be paid at the closing of the pending merger between Safeway and Albertsons. Safeway stockholders will also receive a contingent value right at the closing of the merger relating to any additional net cash proceeds from the sale of PDC, including any amounts released from escrow, any additional payments from Terramar and any holdback amounts not spent for potential contingent liabilities. Safeway estimated these amounts total approximately $29 million, or approximately $18 million net of tax, which, if paid, would represent approximately $0.07 per share.

Safeway undertook the sale of PDC in connection with the Albertsons merger, which was announced in March and is expected to close in January.

Terramar, based in Carlsbad, Calif., is a community and neighborhood shopping center developer and owner.