American Stores Co., which has made a $65 per share tender offer to acquire all outstanding stock in California-based Lucky Stores Inc., has been given approval for the acquisition by the Federal Trade Commission (FTC) but only if it divests certain stores in California to alleviate possible anti-competition problems.
The commission, which enforces federal laws against anti-competitive practices, voted 3-1 to accept for public comment a consent agreement with American Stores under which the company would acquire Lucky Stores Inc.Under the proposed deal, American Stores agreed to divest at least 31 and possibly as many as 37 stores in California, the FTC said in a release. American may divest either its stores or Lucky's stores in all designated areas.
The consent agreement is subject to public comment for 60 days after appearing in the Federal Register, after which the commission decides whether to make it final.
If American does not divest the stores, its management of Lucky's California operations will be governed by a "hold separate" agreement.
Under the agreement, American will be prohibited for 10 years from acquiring specified numbers of retail grocery stores in certain areas in California and Las Vegas, Nev. without prior FTC approval.
The acquisition still needs to be approved by Lucky shareholders, and final approval of the FTC must be obtained.
The offer and withdrawal rights will expire at midnight, New York time, on June 1, unless extended.