Rite Aid Selling Preferred Stock

Rite Aid (RAD Quote) plans to offer 4.6 million convertible preferred shares and apply the proceeds to redeem a series of preferreds already outstanding.

The new convertible shares have a liquidation preference of $25 a share. Rite Aid will grant the underwriters an overallotment option for up to 600,000 additional preferred shares.

The drugstore chain will use the net proceeds, along with its available cash, to redeem its 8% series F cumulative convertible pay-in-kind preferred stock.

Citigroup and J.P. Morgan led the offering. Shares of Rite Aid, based in Camp Hill, Pa., were losing 12 cents to $4.48.