Rite-Aid was up 5.20% on Friday and 7.20% for the week.
The FTC is expected to let Walgreens Boots Alliance's (NASDAQ: WBA) deal to acquire 2,186 Rite Aid (NYSE: RAD) stores sail through. The deal, announced on June 29th, replaced an earlier agreement for Walgreens to acquire the entire company and sell off certain Rite Aid stores to a smaller rival. Walgreens agreed to the smaller store deal after failing to win the FTC's blessing on the takeover of the entire company.
When announcing the smaller deal, Walgreens Executive Vice Chairman and CEO Stefano Pessina said, "We believe this new transaction addresses competitive concerns previously raised with respect to the prior transaction and will streamline and simplify the transition for customers, team members and other stakeholders.” This indicated that Walgreens' lawyers were confident that the smaller deal would satisfy regulators, which apparently it has.
From my understanding (invested in RAD after the Walgreens original merger collapsed), the stock lost 25-30% after the merger lost steam.
Everyone knows about $RAD's debt, as their long-term debt to assets ratio was 62.65%, and their long-term debt to cash multiple was 29.60. $RAD has been one bad step away from bankruptcy for a while now, and a merger with Walgreens was expected to allow Rite-Aid to get out of its own way.
What is your opinion if the deal for Walgreens to acquire over 2,000 of RAD's stores goes through? Is Rite-Aid the same old shitty pharmacy or do you see them being able to take advantage of the recent developments (free flu shots for kids, new President/CEO, ability to equal Walgreen's low prices on drugs) to come back and be a respectable competitor to CVS/Walgreens/other pharmacies?
I think Rite-Aid can survive just as a smaller, more niche-oriented pharmacy. Let's face it, Rite-Aid is pretty much done as a large pharmacy retailer, as it got boxed out of the market by more popular CVS and Walgreens stores, and was undercut by the Walmarts and other cheap pharmacy providers. I think if they can take advantage of specific opportunities that CVS/Walgreens ignore, I don't see why they can't survive. It's at least a huge step up from year-end, where their debt seemed insurmountable and bankruptcy seemed imminent.
Not looking for short-term PPS predictions or advice, looking for genuine advice about Rite-Aid's future.
Submitted September 16, 2017 at 09:25AM by Ruut6 http://ift.tt/2y5Iikj
