• Court Halts Albertsons Dividend, Jobless Rate Stays Low

    Court Halts Albertsons Dividend

    A state court in Washington has put a temporary halt to a planned $4 billion dividend payout by grocery chain Albertsons, which was scheduled to take place Monday ahead of the company’s proposed acquisition by rival Kroger in a $24.6 billion deal.

    Attorneys general in Washington, California, Illinois and the District of Columbia filed suit Nov. 2 to block the payment on grounds that the planned merger was still far from receiving federal approval. The suit also said the payout could hamper Albertsons’ cash flow and ability to compete in the event the deal is rejected by regulators or is otherwise called off.

    On Nov. 3, a judge in Washington’s King County granted a temporary restraining order blocking the dividend payout and scheduled a Nov. 10 hearing to consider the suit's merits. “Putting the brakes on this $4 billion payment is the right thing for Americans shopping at their local grocery store,” Washington Attorney General Bob Ferguson said in a statement regarding the judge’s order.

    A statement from Boise, Idaho-based Albertsons said the company “intends to seek to overturn the restraint as quickly as possible,” on grounds that the attorneys general are incorrect in their claims regarding the potential financial and competitive harm that would be created by the dividend payout.

    A completed acquisition of Albertsons by Cincinnati-based Kroger could create a combined company with nearly 5,000 stores, 66 distribution centers and 52 manufacturing plants. However, regulators in the past have required significant selloffs of store locations to preserve competition as a condition for large supermarket mergers.

    Jobless Rate Stays Low

    The latest Labor Department data showed the October unemployment rate at 3.7%, a slight rise from September’s 3.5% but still hovering around 50-year lows. The economy added 261,000 jobs, better than economists expected but down slightly from the 315,000 added in September.

    Job gains in October were led by professional and technical services at 43,000, leisure and hospitality at 35,000, manufacturing at 32,000 and social assistance at 19,000. There was little or no change for the month in industries including retail trade, financial activities, construction, and transportation and warehousing.

    Following the report, stock markets recovered some of the losses spurred earlier in the week by the Federal Reserve’s latest rate hike, with the Dow Jones Industrial Average closing Friday up 1.26%, the S&P 500 rising 1.36% and the Nasdaq Composite Index gaining 1.28%.

    Layoffs remain low across most industries, though the hard-hit tech industry has seen signs of a slowdown in the form of actions including a hiring freeze at Amazon and pending layoffs at Twitter. Analysts are now watching for whether October’s job numbers affect future rate hike decisions by the Federal Reserve in its quest to tame inflation, which is still running at 40-year highs.

    Source: www.CoStar.com