Rite Aid: Next Takeover Target?
NEW YORK (
)--
Rite Aid
(RAD) - Get Report
could be the next takeover target in the drugstore sector -- at least according to one analyst.
Walgreen's
(WAG)
purchase of Duane Reade on Wednesday could make Rite Aid an even more attractive prospect, UBS analyst Neil Curry wrote in a note.
The prospect sent shares of Rite Aid surging 15.5% to $1.60 in morning trading.
"We believe potential suitors for stores within the Rite Aid portfolio could include
CVS
(CVS) - Get Report
, especially in the Pacific Northwest and Mountain regions; Walgreens in certain urban markets; and
Wal-Mart
(WMT) - Get Report
, given our view that Wal-Mart has significant potential to grow in urban markets, is looking more closely at the economics of a smaller food/drug footprint and appears to have wider healthcare ambitions," Curry wrote.
Rite Aid could fetch as much as $7.7 billion, Curry predicts.
Curry has a buy rating on Rite Aid with a price target of $4.
Walgreen announced on Tuesday that it will buy New York-based Duane Reader for $1.08 billion, including the assumption of $457 million in debt.
-- Reported by Jeanine Poggi in New York.
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>>Walgreen Acquires Duane Reader
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