Tomahawk, WI 03/10/2014 (Basicsmedia) – SafeWay Inc (NYSE:SWY) shares closed at $38.6 i.e 2.2% below the last day’s closing price. The shares   are currently trading at a price above the trailing decade’s highest price point of $37.77 which it touched in April, 2007. The decline became more visible as the news of a definitive merger agreement circulated across the web. The merger price offered from Albertson (another popular groceries chain in the US) is $32.5 in cash and another $3.65 a share allocated pro-rats out of the proceeds of non-core assets’ sales. Taking into account the additional distribution of Black Hawk’s stock the per-share price will go as high as $40.

SafeWay Inc (NYSE:SWY) has been on the look for a suitable buyer of its store real estate after a successfully retrenching the Dominicks’ store-line to WholeFood Mart Inc.

The recent negative trendline in the price is indicative of investor unease over the offered price. The offered consideration for SafeWay Inc (NYSE:SWY) solely (i.e. excluding payment for Black Hawk’s shares), is $36.15 which represents a 6% premium over the closing price on Feb, 18 when the company disclosed its initial intention to consider sell off of its business undertaking. The average premium, for comparable merger transactions executed in the last 3 years’ time is 20% over latest trading price.

Albertson’s value advantage would be a storefront-real-estate that gives it access to a larger geographic footprint across the US. Cerberus Capital Management has been soliciting the merger offers on behalf of the retailer. This definitive agreement has been signed one of its subsidiaries.

The director approved definitive term agreement is yet to be approved by the shareholders. Finkelstein Thompson LLP , Kirby McInerney LLP and few other law firms have commenced un-solicited investigations on behalf of the shareholders of SafeWay Inc (NYSE:SWY) to check if Board of Directors (BOD) breached their fiduciary duties and how fairly they deal with potential conflicts of interest. Another investigating law firm Ryan & Maniskas, LLP has set the focus wider to include violation of state laws by the BOD.  In case of any negative finding, shareholders of a “merger target” can file class action lawsuit against the governance to secure adequate returns on their investment under the merger.

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