Analyst: Rite Aid Could Be Next Takeover Target
UBS Securities’ analyst Neil Currie thinks that once Walgreens has had the
opportunity to complete its purchase of Duane Reade, it might turn its attention
to taking over some or all of Rite Aid’s 4,800 stores. Of course, CVS and Walmart
might have something similar in mind and perhaps more than one of these parties
could buy up part of the drugstore chain.
Rite Aid is valuable to others in the pharmacy business, according to Mr.
Currie, because it “is the last remaining major drugstore asset in the U.S.,
with meaningful exposure to dense urban markets.”
Any of the three chains would benefit from a deal with Rite Aid, Mr. Currie
"We believe potential suitors for stores within the Rite Aid portfolio
could include CVS, especially in the Pacific Northwest and Mountain regions;
Walgreens in certain urban markets; and Walmart, given our view that Walmart
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
Discussion Questions: How likely do you think all or parts of Rite Aid
will be sold? What chain(s) would benefit most from acquiring part or all
of Rite Aid?
- Rite Aid Rises on Speculation It’s a Takeover Target – Bloomberg News/BusinessWeek
- Rite Aid: Next Takeover Target? – TheStreet.com