Rite Aid Corp. (NYSE: RAD) shares were crushed early on Thursday after the company announced a mutual agreement with Albertsons to terminate the merger ahead of the vote.
One of the main takeaways from this is that neither Rite Aid nor Albertsons will be responsible for any payments to the other party as a result of the termination of the merger agreement.
Albertsons was originally offering either a share of its stock and $1.83 in cash or slightly more than one Albertsons share for every 10 Rite Aid shares. The merger would have created a new company with roughly $83 billion in annual sales and 4,900 locations across the United States.
Rite Aid also announced that its board of directors is evaluating governance changes at the company. Although, the company did not go too much into detail about how it plans to accomplish this.
John Standley, Rite Aid’s board chair and chief executive, commented:
While we believed in the merits of the combination with Albertsons, we have heard the views expressed by our stockholders and are committed to moving forward and executing our strategic plan as a standalone company. We remain focused on leveraging our network of conveniently located retail pharmacies, our EnvisionRxOptions PBM and our trusted brand of health and wellness offerings. We will continue building momentum for key areas of our business like our innovative Wellness store format, highly successful customer loyalty program and expanded pharmacy service offerings, as we also enhance our omni-channel and own brand offerings to strengthen our competitive position and create long-term value for stockholders.
Shares of Rite Aid were last seen down more than 11% at $1.54 Thursday morning, with a consensus analyst price target of $1.97 and a 52-week trading range of $1.38 to $2.80.