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Rite Aid

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could be the next takeover target in the drugstore sector -- at least according to one analyst.



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


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, especially in the Pacific Northwest and Mountain regions; Walgreens in certain urban markets; and


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, 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.


>>Walgreen Acquires Duane Reader

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