Rite Aid Gives Up Gains - TheStreet

Rite Aid Gives Up Gains

Rite Aid is giving up Thursday's gains from takeover speculation.
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NEW YORK (

TheStreet

)--

Rite Aid

(RAD) - Get Report

is being cut back down to size Friday, after shares spiked yesterday on talks that it could be the next takeover target in the drugstore sector.

Shares of Rite Aid are falling 5% to $1.47 in morning trading, after closing on Thursday up 11%.

UBS analyst Neil Curry said Rite Aid could make an even more attractive prospect after

Walgreen

(WAG)

purchased

Duane Reade

earlier this week.

"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 health care ambitions," Curry wrote.

Rite Aid could fetch as much as $7.7 billion, Curry predicts.

The company has been struggling ever since it made its own acquisition of the

Brooks & Eckerd

drugstore chain back in 2006.

Rite Aid reported a 2.1% drop in January same-store sales with both its pharmacy and front-end feeling a pinch.

-- Reported by Jeanine Poggi in New York.

RELATED STORIES:

>>Rite Aid: Next Takeover Target?

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