Safeway settles merger lawsuit
Safeway settles merger lawsuit
Safeway Inc. has entered into a settlement for the class action lawsuit filed last month on behalf of Safeway stockholders. The settlement involves adjustments to the sale period and shareholder compensation for Casa Ley (a Mexico-based retailer) and PDC (Safeway's real estate division).
The changes to the terms of the Casa Ley agreement shorten the sale deadline period from four years to three years, at which time the company would provide fair market value for any unsold interests of Casa Ley owned by Safeway. At the time of Safeway's announced sale, it owned 49 percent of Casa Ley, the fifth-largest food and general merchandise retailer in Mexico based on sales.
Among other things, the PDC changes mean that instead of not receiving any value for any assets of Safeway's shopping center portfolio that remain unsold at the end of the two-year sale deadline period, holders would be entitled to the fair market value of the unsold assets.
Safeway's board has also accelerated the expiration date of the stockholder rights plan to June 19, nearly three months earlier than the initial Sept. 15 date.
In March, Safeway and Albertsons announced a $9 billion merger agreement that was unanimously approved by Safeway's board of directors. Attorneys representing the Safeway shareholders said that omitted and/or misrepresented information affected the shareholders' ability to make an informed decision whether to approve the proposed transaction.
According to a press release, Safeway and the board of directors of Safeway believe the claims are entirely without merit, and in the event the settlement does not resolve them, intend to vigorously defend these actions.