Albertsons’ $4 Billion Dividend Faces Uphill Journey
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Albertsons’ $4 Billion Dividend Faces Uphill Journey

Food and drug stores operator Albertsons Companies’ (NYSE:ACI) $25 billion deal with Kroger (NASDAQ:KR) continues to see pushback.

At a time when rising interest rates and prices of goods are wreaking havoc on household budgets, the planned $4 billion dividend is drawing ire from different quarters of the market.

Albertson’s special dividend has been blocked with a temporary restraining order by the court. The company though is seeking to overturn the restraint at the earliest.

Concerns persist that the special payout could make the company financially weaker and it could face bankruptcy if the merger does not go through.

Moreover, the dole out to private equity coming at a time when consumers have to make tough choices over monthly bills is also drawing criticism.

Lawmakers including Senators Elizabeth Warren and Bernie Sanders have asked Cerebrus to stop the dividend payment.

In the meantime, the next hearing of the preliminary injunction is slated for November 10.

Kroger shares have climbed 7.1% over the past month.  

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