Analysts dissect Walgreens-Rite Aid deal

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Zacks Investment Research stock strategists Tracey Ryniec and David Bartosiak discussed with Zacks’ Terry Ruffolo the Walgreens Boots Alliance’s proposal to acquire Rite Aid Corp. for $9 per share in cash, and assumption of debt, for a total value of $17.2 billion.

The companies announced the deal late Tuesday, after news reports about an impending agreement surfaced earlier in the day.

Besides looking at the drug store and pharmacy market implications of a Walgreens-Rite Aid combination, the Zacks analysts also assessed the ramifactions for the companies’ stock. Rite Aid shares shot up over 40% after the first reports of a possible deal emerged. WBA’s share price also rose.

However, both stocks have cooled a bit, the analysts noted. Rite Aid shares closed at $7.88 on Thursday, down from $8.06 on Wednesday and $8.67 on Tuesday. On Monday, the day before the deal was announced, Rite Aid shares closed at $6.08.

WBA shares finished at $83.88 on Thursday, down from the closing price of $84.95 on Wednesday and $95.16 on Tuesday. The company’s stock price closed at $89.48 on Monday, prior to the acquisition announcement.


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