Rite Aid Corporation (NYSE:RAD) Finalizes Extension To Merger Deal With Walgreens Boots Alliance Inc (NASDAQ:WBA)
Rite Aid Corporation (NYSE:RAD) together with Walgreens Boots Alliance Inc (NASDAQ:WBA) reported that they have finalized an amendment and extension of previously reported definitive merger deal under which the latter will BUY all DUE shares of Rite Aid.
Under the terms of the modified deal, the parties have approved to lessen the price for each share of company’s common stock to be compensated by Walgreens. The revised rate will be a maximum of $7 a share and a minimum of $6.50/share. Additionally, Walgreens will be needed to divest up to 1,200 stores and specific additional assets of Rite, if required to get regulatory approval.
The exact price a share will be decided based on the count of needed store divestitures, with the rate at $7/share if 1,000 stores or fewer are needed for divestiture and at $6.50/share if 1,200 stores are needed for divestiture. In case divestitures come between 1,000 and 1,200 stores, there will be a pro-rata correction of the price/share.
The deal to divest up to 1,200 stores of Rite Aid represents a jump of up to 200 stores compared to the 1,000 outlets that Walgreens had accepted to divest under the original agreement terms. Moreover, the two companies decided to extend the end date 31 July 2017 from 27 January 2017 in order to enable the parties additional time to get regulatory approval.
Walgreens Boots is the first international pharmacy-led, wellbeing and health enterprise. The firm was established through the combination of Alliance Boots and Walgreens in December 2014, getting two leading firms with iconic brands, shared values, a heritage of known health care services and complementary geographic footprints on same platform.
In the last trading session, the stock price of Rite Aid declined over 17% to close the day at $5.72. The decline came at a share volume of 112.71 million compared to average share volume of 28.25 million.