Albertsons and Rite Aid made headlines earlier this year after attempting to merge as one. But could there be a riff in the partnership already? According to The Wall Street Journal, some of the would-be subsidiary’s shareholders are not keen on seeing the merger come to fruition, particularly because of concerns that the approximately US$24 billion deal would undervalue the chain. As a result, opposed investors are arguing Rite Aid would be better off overhauling its pharmacies on its own.
The move comes as a surprise following the deeply intertwined plan Albertsons already released following the close of the deal, which included Rite Aid’s Chairman and Chief Executive Officer John Standley becoming Chief Executive Officer of the combined company.
“The deal is absurd based on fair value of Rite Aid’s existing stores and what it could do with them,” Steve Krol, a Florida investor whose shares in the drugstore chain are worth around US$415,000, told WSJ.
Under the deal, Rite Aid investors may exchange 10 of their shares for a share in the combined company, plus US$1.83 in cash. Alternatively, they could exchange 10 shares for 1.079 new shares and would own about 30% of the new business.
Full Content: Wall Street Journal
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