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Investment Funds Will Receive Nearly 26 Percent More than Other Shareholders Post Safeway/Albertson's Merger

Investment Funds Will Receive Nearly 26 Percent More than Other Shareholders Post Safeway/Albertson's Merger


PLEASANTON, CA

Three investment funds that owned stock in Safeway before being sold to Albertson’s have won $44 per share, about 26 percent more than other shareholders received, after an appraisal lawsuit.

Other shareholders received $34.92 a share back in January when the company was acquired by Albertsons for $7.6 billion.

According to the Wall Street Journal’s Liz Hoffman, Albertson's will now be paying the group’s shares totaling upwards of $127 million and potentially serving as a victory for hedge funds that take cases to court after mergers and acquisitions go through.

“In appraisal cases, investors—many of which are hedge funds that buy their shares on the eve of a takeover—oppose the deal and then sue for a higher price,” Hoffman writes, noting that appraisal cases have inclined sharply over the last couple of years, with several retailers currently experiencing similar lawsuits after being sold or partnering with other companies.

This particular case ended in a settlement, according to the report, with both groups still entitled to a portion of any proceeds Safeway could receive from selling its joint stake in Mexico.

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