CINCINNATI - The Kroger Co . (NYSE:KR) announced an extension to the expiration dates for its exchange offers and consent solicitations related to Albertsons (NYSE:ACI) Companies, Inc. (NYSE:ACI) notes. The deadline, previously set for October 28, 2024, at 5:00 p.m. New York City time, has been pushed to November 1, 2024, at the same hour.
This extension applies to all outstanding notes of ACI and its related entities, with Kroger proposing to exchange these for up to $7.44 billion in aggregate principal amount of new Kroger notes and cash. The consent solicitations are to adopt proposed amendments to the indentures governing the ACI notes, specifically for the series where consents have not yet been obtained.
As of August 29, 2024, Kroger had received the required number of consents for some series of notes, leading to the execution of supplemental indentures. However, these amendments will only take effect upon the completion of the exchange offers, which is anticipated to occur shortly after the new expiration date.
The offers are part of a broader merger agreement, where a Kroger subsidiary will merge into ACI, with ACI surviving as a direct, wholly owned subsidiary of Kroger. This merger is expected to close in the fourth quarter of 2024. The exchange offers and consent solicitations are conditional upon the merger's completion, a condition that Kroger cannot waive.
Eligible note holders, who are either qualified institutional buyers or non-U.S. persons, can obtain the offering memorandum detailing the exchange offers and consent solicitations terms by contacting the exchange agent. The Kroger notes to be issued have not been registered under the Securities Act of 1933 or any state securities laws, and as such, may only be offered or sold under specific exemptions.
The information for this article is based on a press release statement from The Kroger Co.
In other recent news, Albertsons Companies Inc. has been the focus of varied analyst ratings. Research firm Melius upgraded Albertsons from Hold to Buy, setting a price target of $24.00, based on several valuation approaches and despite uncertainties surrounding a proposed merger. In contrast, BMO Capital reduced Albertsons' price target from $21.00 to $19.00, maintaining a Market Perform rating due to concerns about potential ongoing losses in grocery market share.
Albertsons recently reported a year-over-year decline of 18% in its second quarter fiscal year 2025 earnings, yet surpassed earnings per share forecasts. The company also declared a quarterly cash dividend of $0.12 per share of common stock.
Meanwhile, Albertsons and Kroger Co. are progressing towards a proposed merger, which is facing resistance from the U.S. Federal Trade Commission and several states due to concerns about potential price hikes and weakening of unionized employees' bargaining power. Kroger has extended the expiration dates for its exchange offers and consent solicitations related to Albertsons' notes, with consents surpassing the required threshold. All these are recent developments in the ongoing saga of the Albertsons-Kroger 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 $10.87 billion, with a P/E ratio of 10.95, indicating a relatively low earnings multiple. This valuation metric 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 Q2 2025 was $79.71 billion, with a modest growth of 1.21%. Despite this growth, ACI's EBITDA saw a slight decline of 3.69% over the same period. These figures suggest that while ACI maintains a strong market presence, it faces some challenges in expanding its profitability.
An InvestingPro Tip highlights that ACI is a "Prominent player in the Consumer Staples Distribution & Retail industry," which underscores the strategic importance of Kroger's proposed merger. This merger could potentially leverage ACI's strong industry position to create a more robust combined entity.
It's also noteworthy that ACI is currently trading near its 52-week low, as indicated by another InvestingPro Tip. This could be a factor in the timing of Kroger's exchange offers and the overall merger strategy.
For investors seeking a deeper understanding of ACI's financial health and prospects, InvestingPro offers 5 additional tips beyond those mentioned here. These insights could provide valuable context for assessing the implications of the Kroger-Albertsons merger.
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