Tenant Description

Rite Aid is a national drugstore operator. The Corporation is one of the leading drugstore chains in the United States and a Fortune 500 company, #94 in 2018. As of 3/8/2018, Rite Aid operated 2,550 stores in 19 states across the country. Headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania, Rite Aid is publicly traded company, NYSE: RAD. Rite Aid stores service prescription drug customers and offer other general merchandise, called front-end products. Front end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, beverages, convenience foods, greeting cards, seasonal merchandise, and other everyday and convenience products, and photo processing. They also offers approximately 3,300 products under the Rite Aid private brand. The average size of each store in the Company’s chain is 11,000 to 15,000 square feet. Over 50% of its stores are freestanding and another 50% of its stores include a drive-thru pharmacy. Many locations feature one-hour photo shops and include a GNC store-within-Rite Aid-store.

Sale of Stores to Walgreens

On October 27, 2015, Walgreens announced that it would acquire Rite Aid in a deal valued at $9.4 billion ($9 per share), pending regulatory and shareholder approval. The deal would have resulted in a merger of two of the United States’ three largest pharmacy chains. Walgreens planned to keep the Rite Aid name on existing stores when the deal went through, though the long term plans for the Rite Aid name were unknown. On December 21, 2016, it was announced that Fred’s would acquire 865 Rite Aid stores as a result of the merger for $950 million, for antitrust reasons. In January 2017, Rite Aid and Walgreens cut the price of the merger to approximately $6.8 billion and delayed the merger by six months. On January 31, 2017, it was reported that the workers’ union 1199SEIU United Healthcare Workers East, representing 6,000 Rite Aid Corp workers, was opposed to the sale of the Rite Aid stores to Fred’s Inc. On June 29, 2017, Walgreens (WBA) announced the merger was cancelled, adding that it would be purchasing 2,186 stores from Rite Aid for $5.2 billion plus a $325 million penalty for cancelling. Most experts had thought that the merger would be completed within a few weeks. The merger would have had about 46% of the market share. The revised deal—now not including Fred’s at all—effectively would have seen Rite Aid exit the Southeastern United States. On September 19, 2017, the Federal Trade Commission (FTC) approved a fourth deal agreement, this time allowing Walgreens to purchase only 1,932 Rite-Aid stores for $4.38 billion. The sale was completed on March 27, 2018. Three distribution centers and related inventory will be transferred after September 1, 2018, when the stores will be rebranded to Walgreens. The 1,932 stores have banners saying “Pharmacy now operated by Walgreens” in the meantime.

Attempted acquisition by Albertsons

On February 20, 2018, Albertsons announced plans to acquire the remainder of Rite-Aid, including the 2,600 stores not acquired by Walgreens, in a merger of equals, subject to shareholder and regulatory approval. On August 8, 2018, Rite Aid announced that the plan had failed to please shareholders and the proposed acquisition would be cancelled.

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