A state court in Washington had temporarily blocked Albertsons from paying a special dividend before the grocery chain closes its proposed deal with rival Kroger Co.

Last week, the court had extended the payment block and set a hearing for Nov. 17 to further consider whether to prolong an existing order of prohibition.

Albertsons, which had been scheduled to pay the special dividend on Nov. 7, was also sued by the attorneys general of the District of Columbia, California and Illinois, who argued such a payment would weaken the company's ability to compete as the antitrust reviews proceed.

Kroger said in October it was buying Albertsons in a $25 billion deal that would merge the No. 1 and 2 standalone grocers.

(Reporting by Granth Vanaik in Bengaluru; Editing by Krishna Chandra Eluri)