Rite Aid Corporation (NYSE: RAD) is having an overwhelmingly strong start to the trading session in the pre-market hours today, and for a very good reason. It was announced early this morning that the company would be acquired. Today, we’ll talk about the acquisition, what we’re seeing from RAD as a result, and what we’ll be watching for ahead.
RAD Announces Acquisition News
As mentioned above, Rite Aid is having an overwhelmingly strong day in the market today after announcing that it will be acquired. According to the announcement, the company has entered into an agreement under which Albertsons will purchase the company. According to various reports, the agreement could generate around $83 billion in revenue.
Under the terms of the agreement, RAD shareholders will have the ability to choose how they want to be paid for their shares. For every 10 shares of Rite Aid owned, shareholders can exchange for 1 share of Albertsons as well as $1.83 in cash. Shareholders can also choose to keep all shares in Albertsons, making it an all-share transaction at 10 RAD shares per 1.079 Albertsons share. In a statement, John Standley, CEO at Albertsons had the following to offer:
This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health, and wellness needs… The combined platform positions Rite Aid to capitalize on our pharmacy expertise and expand and enhance our pharmacy footprint. We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling long-term value for shareholders.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, not only is Rite Aid being acquired, but the company is generating a great premium in the process, immediately providing a return of value for shareholders. So, it’s no surprise to see that the stock is screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:59), RAD is trading at $2.65 per share after a gain of 24.41% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on RAD. In particular, we’re interested in following the merger with Albertsons to ensure that everything goes smoothly here. Remember, the deal is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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