The proposed merger between Boise’s Albertsons and Kroger is likely to fail. At least, that’s what stock market investors seem to think.
Two years ago, Cincinnati-based Kroger, the nation’s largest traditional grocery company, agreed to buy Albertsons, the second-largest, for $34.10 per share. But Albertsons’ stock price has fallen significantly below the price its shareholders would receive if the deal goes through. It was $18.44 per share as of Tuesday.
“This stock price is the market saying ‘No, it’s not going to happen,’” said Dave Petso, of Petso Financial Consultants in Boise, in a phone interview with the Idaho Statesman. “It’s also telling you that the company is in serious trouble.”
Even if Albertsons and Kroger win their lengthy court battle with the Federal Trade Commission, attorneys general from several states have lined up to prevent the deal from going through. The FTC sued in February to block the merger, saying it would lead to higher consumer prices, since the companies compete in hundreds of markets across the country, including the Boise area, where Kroger operates Fred Meyer stores.