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CINCINNATI - The Kroger Co . (NYSE:KR) has extended the expiration date for its exchange offers and consent solicitations related to Albertsons (NYSE:ACI) Companies, Inc. (NYSE:ACI) notes. The new deadline for note holders to participate is now set for October 9, 2024, pushed back from the original expiration date of October 3, 2024.
This extension applies to the exchange of any and all outstanding notes issued by ACI, New Albertsons, L.P., Safeway Inc., Albertson's LLC, Albertsons Safeway LLC, and American Stores Company, LLC. In return, Kroger is offering up to $7.44 billion in aggregate principal amount of new Kroger notes and cash.
As part of the exchange, Kroger is also soliciting consents to adopt proposed amendments to the ACI indentures for the Unconsented Series, which refers to certain series of ACI notes where the required number of consents has not yet been obtained. The consent solicitations are subject to the same extended deadline.
The exchange offers and consent solicitations are contingent upon the completion of a merger in which a subsidiary of Kroger will merge with and into ACI, with ACI surviving as a direct, wholly owned subsidiary of Kroger. The merger is expected to close in the fourth quarter of 2024, which may result in further extension of the expiration date by Kroger.
The Proposed Amendments to the ACI indentures will become operative upon the settlement of the exchange offers, which is anticipated to occur promptly after the expiration date. The settlement is also expected to coincide with or follow shortly after the merger's completion.
Eligible note holders who wish to participate in the exchange offers and consent solicitations must complete and return an eligibility certificate. Documents detailing the offers and solicitations are available only to qualified institutional buyers or non-U.S. persons in compliance with applicable securities laws.
The Kroger notes being offered have not been registered under the Securities Act of 1933 or any state securities laws, and as such, may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
This news is based on a press release statement from The Kroger Co. and does not constitute an offer to sell or purchase securities. The full terms and conditions of the exchange offers and consent solicitations are outlined in the confidential offering memorandum provided by Kroger.
In other recent news, Kroger Co. is making significant strides in its exchange offers and consent solicitations for Albertsons Companies Inc. notes. The company has extended the expiration date of these offers and has received consents surpassing the required threshold to amend terms on various ACI notes series. These developments are contingent on the successful closure of Kroger's merger with Albertsons, which is expected in the fourth quarter of 2024.
However, the proposed merger is facing challenges from the U.S. Federal Trade Commission (FTC) and several states, who voice concerns about potential price hikes and weakening of unionized employees' bargaining power. Despite these concerns, Kroger CEO Rodney McMullen has refuted any potential price increases post-merger, underscoring the importance of competitive pricing.
In the courtroom, McMullen attributed the rise in grocery prices to higher supplier costs, fuel prices, and credit card swipe fees. The merger's necessity is argued to scale up and compete effectively with larger retailers. The trial continues as the court examines the potential impacts of the merger on the grocery industry and consumers. These are recent developments in the ongoing saga of the Kroger-Albertsons merger.
InvestingPro Insights
As Kroger extends its exchange offers for Albertsons Companies, Inc. (ACI) notes, it's worth examining ACI's current financial position. According to InvestingPro data, ACI's market capitalization stands at $10.75 billion, with a P/E ratio of 9.54, indicating a relatively low earnings multiple. This aligns with one of the InvestingPro Tips, which notes that ACI is "trading at a low earnings multiple."
The company's revenue for the last twelve months as of Q1 2023 was $79.45 billion, with a modest growth of 1.36%. Despite this growth, ACI's stock is currently trading near its 52-week low, as highlighted by another InvestingPro Tip. This could be a factor in Kroger's decision to extend the exchange offer deadline, potentially allowing more time for market conditions to stabilize.
Interestingly, ACI boasts a dividend yield of 2.59%, which could be attractive to income-focused investors. However, it's important to note that the company's short-term obligations exceed its liquid assets, as pointed out by an InvestingPro Tip. This financial situation might be a consideration in the ongoing merger process with Kroger.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights on ACI's financial health and market position. In fact, there are 7 more InvestingPro Tips available for ACI, providing a deeper understanding of the company's prospects as it navigates this significant corporate action with Kroger.
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