Former Albertsons Shareholder FAQ
Frequently asked questions regarding the merger transaction settlement1.
Q. What will I receive for my Albertsons’ shares as a result of the SUPERVALU acquisition?
A. The terms of the merger are for every share of Albertson’s stock held previously, the shareholder will receive $20.35 in cash (without interest) and 0.182 shares of SUPERVALU common stock.
So, for example, if the shareholder owned 10 shares of Albertsons stock, they will receive a check for $203.50 plus 1 share of SUPERVALU stock (10 x .182 = 1.82). The fractional share (.82) will be sold. Cash in-lieu of such fractional share will be issued at .82 x $29.59. (This share price is the average for the 10 day period prior to the close of the merger.) Thus, in this scenario, they will receive a check for $24.26 for this fractional share.
Q. When will I receive it?
A. Letters of Transmittal will be sent out during the period June 7-12, 2006. Merger consideration will be paid out promptly to each shareholder that submits his or her Letter of Transmittal and related information for processing.
Additionally, SUPERVALU is offering an option to Albertsons shareholders to enroll in a dividend reinvestment plan (DRIP). An enrollment form for the DRIP plan will be included with the Letter of Transmittal.
Q. When was the merger completed?
A. The merger was effective June 2, 2006
Q. Who should I speak with regarding the tax impacts of the Supervalu/Albertson’s transaction on the merger consideration that I will receive in exchange for my Albertson’s shares?
A. Tax matters are complicated, and the tax consequences of the Supervalu/Albertson’s transaction to each stockholder will depend on the facts of each stockholder’s situation. General information is included beginning on page 98 of the proxy statement/prospectus dated April 28, 2006 that was previously provided to Supervalu and former Albertson’s stockholders, under the section entitled “Material United States Federal Income Tax Consequences [click here to access this section].” In addition, each stockholder should consult his or her own tax advisor for a full understanding of the tax consequences of their participation in the transaction.
Q. As a recipient of merger consideration in the transaction, the proxy statement/prospectus indicates that I might recognize capital gain or loss for United States federal income tax purposes equal to the difference, if any, between (1) the sum of the fair market value of the Supervalu common stock as of the effective time of the Supervalu merger and the amount of cash I received as merger consideration and (2) my adjusted tax basis in my shares that were converted into the right to receive merger consideration in the merger. How do I calculate the fair market value of the Supervalu common stock that I received for this purpose?
A. Each stockholder should consult his or her own tax advisor in order to determine the appropriate metric for that calculation. The merger became effective on June 2, 2006 at 3:06 a.m. Eastern time. For your reference, the chart below sets forth various prices per share of Supervalu common stock as reported on the New York Stock Exchange’s consolidated tape consolidated quotes system and the “volume weighted average price” (VWAP) as reported by Bloomberg:
| June 1, 2006 | June 2, 2006 | |
|---|---|---|
| Open | $29.20 | $29.75 |
| Close | $29.75 | $29.40 |
| High | $29.79 | $29.75 |
| Low | $28.96 | $28.71 |
| Average of High and Low | $29.38 | $29.23 |
| VWAP | $29.61 | $29.20 |
Q. On what basis will a stockholder determine his or her cost basis in their former shares of Albertson’s stock?
A. Shareholders attempting to determine their cost basis should refer back to their old statements (if they were in the dividend reinvestment plan) or receipts (if they bought their shares from a broker). SUPERVALU’s transfer agent, Wells Fargo, does not have history for the Albertsons dividend reinvestment plan. If a shareholder needs duplicate statements for cost basis analysis, they should contact the prior transfer agent, American Stock Transfer, at 1-800-937-5449.
Q. Will Wells Fargo, the paying agent for the Albertson’s/Supervalu transaction, withhold tax on the cash portion of the merger consideration paid to a former holder of Albertson’s common stock that was a non-U.S. holder?
A. Each former Albertson’s stockholder with a foreign address will be sent a Form W-8 along with a letter of transmittal that will allow such stockholder to submit his or her stock certificates in exchange for merger consideration. As long as a non-U.S. holders provides the paying agent with a completed Form W-8, no U.S. taxes are expected to be withheld from the distribution of the cash portion of the merger consideration.
1The answers provided above are not intended to be used and cannot be used for the purposes of avoiding tax penalties. You should seek advice based on your own particular circumstances from an independent tax advisor.