SUBSEQUENT EVENT
Distribution of Blackhawk Shares On March 24, 2014, Safeway's Board of Directors declared a special stock dividend to its
stockholders of all of the 37.8 million shares of Class B common stock of Blackhawk owned by Safeway,
representing approximately 94.2% of the total outstanding shares of Blackhawk's Class B common stock
and approximately 72% of the total number of shares of Blackhawk common stock of all
classes outstanding. On April 14, 2014, Safeway distributed the special stock dividend to all Safeway
stockholders of record on April 3, 2014 (the "Record Date"). The distribution took place in the form of
a pro rata dividend of Blackhawk Class B common stock to each Safeway
stockholder of record on the Record Date. Safeway stockholders
received 0.164291 of a share of Blackhawk Class B common stock for every share of
Safeway common stock held as of the Record Date, less any shares withheld in
respect of applicable withholding taxes. No fractional shares of
Blackhawk stock were distributed. Instead, Safeway stockholders
received cash in lieu of any fraction of a share of Blackhawk stock.
Assuming the acquisition by AB Acquisition is completed as contemplated by
the Merger Agreement (see Note A), it is expected that Safeway’s distribution of Blackhawk shares will be
taxable to Safeway and Safeway’s stockholders. Based on Safeway’s
preliminary estimates and after the application of tax payments previously
made in connection with Safeway's sale of shares in the initial public
offering of Blackhawk's Class A common stock in April 2013, Safeway expects
that the distribution of Blackhawk shares will result in an incremental tax
to Safeway of approximately $360 million.
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