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Grocer Albertsons eyes Rite Aid deal in health care push

23 February, 2018, 01:59 | Author: Samuel Sharp
  • Rite Aid Corporation (NYSE:RAD) Jumps 23.47% Tuesday's Pre-market after Takeover News

Dimensional Fund Limited Partnership holds 0% of its portfolio in Rite Aid Corporation (NYSE:RAD) for 4.75 million shares.

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 USA states. "Taking care of customers and patients is a top priority". Rite Aid reported revenue of $32.8 billion in its most recent fiscal year, which ended in March 2017.

A combined Albertsons and Rite Aid brand would value to $24 billion, including debt. The integrated company will operate about 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C., serving 40 more than million customers per week.

"This combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers' evolving food, health, and wellness needs", said Rite Aid Chairman and Chief Executive Officer John Standley in the release. Finally, Leisure Capital Management acquired a new position in shares of Rite Aid during the third quarter worth $353,000.

Once sales to Walgreen are completed, Rite Aid would have 44 stores left in Maryland, which subsequently would be acquired by Albertsons. Shareholders of Boise, Idaho-based Albertsons, which is now privately held, will own more than 70 percent of the combined company. The companies said the name of the combined company will be determined by transaction close. Oppenheimer & owns 0.01% invested in Rite Aid Corporation (NYSE:RAD) for 113,786 shares. Rite Aid had 25 analyst reports since August 6, 2015 according to SRatingsIntel.


The Board of Directors will be comprised of nine directors, four of whom will be named by Albertsons (including Miller and Lenard Tessler, Vice Chairman and Senior Managing Director at Cerberus), four of whom will be named by Rite Aid (including Standley) and one of whom will be a jointly selected director. As per Thursday, October 29, the company rating was downgraded by Credit Suisse. LLC served as lead financial advisors to Albertsons Companies and Schulte Roth & Zabel LLP acted as legal advisor. The price of the Albertsons' transaction was not disclosed. Albertsons even has launched a digital platform created to give CPG brands access to shopper data to help them deliver targeted ad campaigns, showing that it is very serious about engaging consumers at all points of the shopper journey.

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.

Immediately following completion of the merger, Albertsons will have approximately 392.9 million shares outstanding on a pro forma and fully diluted basis. If the deal is approved by shareholders and regulators and closes in the second half of 2018 as expected, the grocery chain - which has more than 2,300 stores in 35 states and the District of Columbia under the Albertsons, Safeway and other brands - would substantially expand its geographic footprint.

Albertsons, which did not disclose the deal's value, is offering either a share of its stock and $1.83 in cash or slightly more than a share for every 10 shares of Rite Aid.

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