Pleasanton, Calif. – Safeway Inc. has entered into a memorandum of understanding to settle the consolidated class action pending in Delaware state court filed on behalf of alleged Safeway stockholders against Safeway in connection with Safeway's proposed merger with an affiliate of AB Acquisition LLC. The proposed settlement includes moving the expiration date of Safeway’s “poison pill” shareholder rights plan three months ahead to June 19, 2014.
The settlement also reduces the deadline to sell Safeway's interests in Mexican retail chain Casa Ley to three years from four years. If Safeway's equity interest is not sold by the deadline, holders of contingent value rights under a Casa Ley agreement would receive fair market value of the unsold value. Under previous terms, contingent value rights holders would not have received any unsold value.
The proposed settlement must be approved by the court and Safeway said it believes the claims of the suit are without merit and it will fight the suit in court if the settlement is not approved.