Retail News Breaks
Jean Coutu lowers stake in Rite Aid
April 17th, 2013
LONGUEUIL, Quebec – The Jean Coutu Group has sold over 40% of its shares in Rite Aid Corp., reducing its equity stake in the U.S. drug chain.
Jean Coutu said late Tuesday that it completed the sale of 72,500,000 of its 178,401,162 Rite Aid common shares an average price of $2.20 (U.S.) per share, for total proceeds of $158.5 million.
The Quebec-based drug chain said sale of the shares lowers its interest in Rite Aid's outstanding common shares to 11.7%.
Jean Coutu added that it will record a gain of $49.7 million (U.S.) as part of its net earnings for its fiscal 2014 first quarter.
Over the past couple of years, Jean Coutu has scaled down its equity stake in Rite Aid. In July 2011 the Canadian drug chain sold 10% of its Rite Aid common shares, and then in late April 2012 completed the sale of 24% of its Rite Aid shares, which lowered its interest in Rite Aid to about 19.9%.
Jean Coutu acquired a 32% common equity stake in Rite Aid through a $3.4 billion deal announced in August 2006, in which it sold Rite Aid its U.S. retail pharmacy subsidiary, including more than 1,850 Brooks and Eckerd drug stores. Under the agreement, Jean Coutu received received $2.36 billion in cash, subject to a working capital adjustment, and 250 million shares of Rite Aid common stock, which gave it 30.2% of the voting power in Rite Aid. The deal closed in June 2007.
Jean Coutu Group operates a network of 405 franchised drug stores Quebec, New Brunswick and Ontario under the banners PJC Jean Coutu, PJC Clinique, PJC Santé and PJC Santé Beauté.
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