Rite Aid (RAD) Stock Gains, Reportedly Nears FTC Approval of Walgreens Deal

Rite Aid (RAD) stock is higher in pre-market trading as it reportedly discusses divestitures for its proposed Walgreens (WBA) deal with the FTC.
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Rite Aid (RAD) - Get Report are up 5.13% to $7.38 in pre-market trading on Friday as the drugstore chain discusses with the FTC what it needs to divest to gain regulatory approval of its planned $17 billion merger with Walgreens Boots Alliance (WBA)sources told the New York Post.

The talks signal that the regulators are open to approving the merger, according to the Post.

Investors have been worried about the FTC's lengthy review of the deal following regulators' decision to block the proposed merger between Staples (SPLS) and Office Depot (ODP) earlier this year because of antitrust concerns.

But Walgreens has been quietly auctioning stores in areas where the combined company would have excessive overlap, and risk in the pharmaceutical company is inflated, the source said.

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Rite Aid's strengths such as its robust revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.

You can view the full analysis from the report here: RAD

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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