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conditions. The conditions were contained in an agreement titled
“Hold Separate Agreement” (hold separate agreement). That
agreement required American Stores to:
a. refrain from integrating the assets of American
Stores and Lucky Stores until American Stores had
divested itself of 24 of its 54 Alpha Beta supermarkets
in Northern California;
b. maintain separate books and records for the
acquisition;
c. prevent any waste or deterioration of Lucky
Stores’ California operations;
d. refrain from replacing the executives of Lucky
Stores;
e. maintain Lucky Stores as a viable competitor in
California;
f. refrain from selling or otherwise disposing of
Lucky Stores’ California warehouses, distribution or
manufacturing facilities, and retail grocery stores;
g. preserve separate purchasing for Lucky Stores’
retail grocery sales.
Relying on the FTC’s proposed consent order of May 31, 1988,
American Stores proceeded with its tender offer to purchase 100
percent of Lucky Stores stock. American Stores’ tender offer for
Lucky Stores stock was carried out by a wholly owned subsidiary
of Alpha Beta, Alpha Beta Acquisition Corp. (ABAC). ABAC had
been formed solely for the purpose of acquiring the stock of
Lucky Stores. On June 2, 1988, ABAC acquired more than 80
percent of the Lucky Stores common stock at $65 per share. As
between ABAC and the former Lucky Stores shareholders, ABAC’s
acceptance and purchase of stock was final and irrevocable.
Petitioner’s objective in acquiring Lucky Stores was to
achieve future long-term benefits from the merger of the Alpha
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