Unilever, Rite Aid and Facebook highlighted as Zacks Bull and Bear of the Day
Walgreens and Rite Aid called off their merger but made a secondary deal instead that where WBA will buy 2,186 RAD stores for$5.2 billion. Also, Walgreens will pay Fred’s, Inc. (NASDAQ:FRED) a $325 million termination fee for ending its agreement to sell the Tennessee discount retailer and pharmacy as many as 1,200 Rite Aid stores. My position on RAD stock before the merger was simple: If the sale doesn’t go through for whatever reason, Rite Aid was in trouble.
There’s been a lot of drama in the merger between Rite Aid Corporation (NYSE:RAD) and Walgreens Boots Alliance Inc (NASDAQ:WBA). As doubts lingered about whether the Federal Trade Commission would approve the deal, RAD stock continued to sink to new lows. WBA management took matters into its own hands and began reworking the deal with RAD, agreeing to pay a $325 million termination fee.
The Rite Aid that will emerge from the WBA deal will be much different than the company that existed before the deal. Walgreens was going to buy RAD for $9.4 billion, or about $9 per share. The Federal Trade Commission (FTC) didn’t like that idea, so it told Walgreens and Rite Aid to go back to the drawing board.
Consider that in January, Rite Aid was valued at more than $8.5 billion, versus a valuation of around $2.4 billion today. Investors should ask themselves this: Other than market expectations and Walgreens’ decision to end its merger attempt, what has drastically changed for the worse in six months? Plus, with Walgreens instead deciding to buy roughly half of Rite Aid’s stores, from which the latter can use proceeds to pay down debt, Rite Aid’s fundamental metrics can drastically improve.
Ever since Rite Aid Corp.'s (RAD) merger deal with Walgreens Boots Alliance Inc. (WBA) fell through on Jun 29, the stock has turned in to a forbidden fruit for investors.
Since the Walgreens Boots Alliance Inc (NASDAQ:WBA) merger fell through, Rite Aid Corporation (NYSE:RAD) has given up the ghost. Instead, to avoid regulatory hurdles, Walgreens opted to buy about half of Rite Aid’s total locations, including three distribution centers.
Leerink said in a note on Thursday it remains incrementally more cautious on the shares of Walgreens Boots Alliance Inc (NASDAQ: WBA ) following the release of its quarterly results and after analyzing ...
Fred's, (FRED), which has been struggling to recover from the blow of a failed merger between Rite Aid Corporation (RAD) and Walgreens Boots Alliance (WBA), recently announced soft June comparable store sales.
Over the last few months, pharmacy chain Rite Aid Corporation (NYSE:RAD) has been on a rollercoaster ride as investors questioned whether a merger with Walgreens Boots Alliance Inc (NYSE:WBA) would go through. Last week, the ordeal finally came to an end after two years of back-and-forth between the two companies and the Federal Trade Commission.
The new agreement would enable Walgreens Boots Alliance (WBA) to buy nearly half of the Rite Aid business at a deal value, almost one-third of the original price.
Despite losing out on hundreds of Rite Aids, Fred’s Inc. is forging ahead with its transformation into a personal healthcare company.