CAMP HILL, Pa. — Last month Rite Aid Corp. announced that its board of directors has approved a reverse stock split of the company’s common stock. The reverse stock split is intended to enable Rite Aid to regain full compliance with the New York Stock Exchange listing rules. The split is subject to stockholder approval.
The retailer plans to hold a special meeting of stockholders, at which stockholders will be asked to vote on a proposal to adopt and approve the reverse stock split, on March 21 at the offices of Skadden, Arps, Slate, Meagher & Flom in New York City. Rite Aid’s board had set February 5 as the record date for stockholders entitled to vote at the special meeting.
If stockholders approve the reverse stock split, Rite Aid’s board will select a reverse stock split ratio of either 1-for-10, 1-for-15 or 1-for-20 so that, depending on the ratio chosen, either 10, 15 or 20 shares of issued and outstanding common stock will convert into one share of common stock. The price of each common share is expected to increase so that a stockholder would have fewer but higher-priced shares.
A reverse stock split will not have any impact on the voting and other rights of stockholders, and will have no impact on the company’s business operations or any of its outstanding debt.
Even if the reverse stock split is approved by the stockholders, the board may delay or abandon the reverse stock split at any time prior to the effective time of the reverse stock split, if the board determines that the reverse stock split is no longer in the best interests of the company or the stockholders.
Rite Aid’s common stock continues to be listed on the NYSE, and it will continue to trade as usual during the stock’s six-month cure period.