Albertsons to buy Rite Aid as Amazon threat looms

Albertsons to buy Rite Aid as Amazon threat looms

Albertsons to buy Rite Aid as Amazon threat looms

Rite Aid Corporation has a consensus hold rating from 9 Wall Street analysts, and the number of shares now sold short amount to at least 13.76% of shares outstanding.

Rite Aid CEO John Standley will serve as CEO of the combined company while Albertsons CEO Bob Miller will serve as Chairman.

This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers' evolving food, health, and wellness needs... Like its drugstore chain competition, Rite Aid also operates walk-in clinics that can deal with cases of the flu, sinus infections and other relatively minor complaints.

The companies expect their combined entity to trade on the New York Stock Exchange. Finally, Leisure Capital Management acquired a new position in shares of Rite Aid during the third quarter worth $353,000.

Headquartered in Boise, Idaho, the combined company will operate 4,900 locations, with 4,350 pharmacies - including those inside grocery stores - and 320 clinics in 38 U.S. states. Albertsons announced on Tuesday that as part of its effort at reinvigoration, it would buy the remnants of the Rite Aid community pharmacy chain.

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The companies said the combination is expected to leverage a strong pharmacy network and Rite Aid's PBM, EnvisionRxOptions, to drive significant customer growth. Rite Aid Corp now has $2.12B valuation.

Albertsons is a private company, but once the share exchanges are complete, almost 393 million outstanding shares will be traded on the New York Stock Exchange, the news release states.

Albertsons is merging with Rite Aid's remaining holdings by paying $1.83 in cash and one share of Albertsons stock in exchange for every 10 shares of Rite Aid stock.

Chief execs of both companies feel the merger is the 2 companies' only chance to compete with Amazon (which is pushing hard into food retail) and Walmart (which is beefing up its e-commerce).

The merger will also allow greater utilization of data analytics and integrated loyalty programs, the companies said.

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Under the terms of the agreement, RAD shareholders will have the ability to choose how they want to be paid for their shares.

Shareholders of Rite Aid will own up to 29.6 percent of the new company while shareholders of Albertsons will own up to 72.6 percent of the new company. Oppenheimer & owns 0.01% invested in Rite Aid Corporation (NYSE:RAD) for 113,786 shares.

Albertson's primarily owned by Cerberus, a private equity company that briefly owned Chrysler and was recently in the news in Chapter 11 bankruptcy filing for firearms maker Remington.

Cerberus first took a stake in Albertsons in 2006 and scaled it through acquisitions including that of Safeway in 2014.

A majority of the board will be independent. Lenard Tessler will serve as Lead Director.

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While looking at the Stock's Performance, Rite Aid Corporation now shows a Weekly Performance of 10%, where Monthly Performance is -4.76%, Quarterly performance is 42.86%, 6 Months performance is -0.9% and yearly performance percentage is -62.96%.

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