Albertsons to buy (what's left of) RiteAid

lola42
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Re: Albertsons to buy (what's left of) RiteAid

Post by lola42 » March 30th, 2018, 5:37 pm

Rite Aid said the “waiting period under the Hart-Scott-Rodino Antitrust Improvements Act” has expired.

https://www.forbes.com/sites/brucejapse ... 9afe8568f8

pseudo3d
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Re: Albertsons to buy (what's left of) RiteAid

Post by pseudo3d » April 14th, 2018, 3:46 pm

They're saying that some big Rite Aid shareholders will vote against the merger. Don't know if it will save Rite Aid's independence, but, and I may be wrong on this, with Rite Aid's price very low (which is more than it was on March 28, a $1.49, now $1.68, which may or may not be a dead cat bounce, but far less than even $2, which was it just prior to the announcement), it would make Rite Aid easy to purchase but wouldn't it make the resulting Albertsons stock worthless as well?

https://www.wsj.com/articles/rite-aid-s ... 1523543076

storewanderer
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Re: Albertsons to buy (what's left of) RiteAid

Post by storewanderer » April 14th, 2018, 10:56 pm

This deal with Albertsons is valuing the remaining Rite Aid Stores at less than $685,000 each. That also ignores whatever the value of Rite Aid's PBM Envision RX is. The stores sold to Walgreens sold for about $2 million each. Walgreens got far worse stores than what Rite Aid is left with which are the best and highest volume stores.

Albertsons is trying to ram this merger through ASAP so Rite Aid's true profitability once divesting off all the poor stores and paying off billions in debt is not revealed. Once revealed, Rite Aid stock would rise to at least double if not triple the current value. Rite Aid will be very profitable and will have per-store sales metrics favorable or even better than CVS and Walgreens.

I am also curious about divesting stores. I am sure some stores will have to be divested. The proceeds from selling the divested stores to CVS or Walgreens even if it is only 300 stores or something, might be more than the market cap of the entire Rite Aid Corporation right now.

The current Rite Aid share price is a view of what the "market" thinks Albertsons is worth. This is why Albertsons could never get its IPO off the ground. It is funny as Cerberus/Albertsons tried to push this same "reverse merger" thing on Safeway but the Safeway BOD refused it and insisted on the offer that ended up being made. The one that put the company many billions in debt and has prevented it from being profitable since the debt burden is simply too high (and taking Rite Aid from its shareholders will not change the fact that the company will continue to lose money due to too high of debt).

Has anyone ever seen a merger before where the share price of the company in question falls 40% after the merger is announced? I am sure there are examples but it isn't common.

Albertsons did just post a profit thanks to real estate sale-leaseback transactions, tax law benefits, and some other one time activities... at least, posted as such based on their unaudited financial statements.

My hat is off to Albertsons for trying to steal (I mean add) stores and grow their company (even if they aren't paying shareholders properly for such growth). Unlike Kroger who is not growing store count, canceling various new build marketplace stores, delaying remodels on stores that BADLY need remodels, selling off profitable and synergistic convenience stores......... it is really funny when the superior operator seems to want to spend (waste) its money on things other than what it does best: operating stores.

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