Fred’s Pharmacy (Nasdaq: FRED) Acquiring 950 Rite Aid Stores

Fred’s Inc.; Nasdaq: FRED

Shares of $FRED are up over 80% on acquisition news. Fred’s Inc. today announced that the Company has signed an agreement with Walgreens Boots Alliance, Inc. (NASDAQ: $WBA) and Rite Aid Corporation (NYSE: $RAD) to purchase 865 stores in an all-cash transaction valued at $950 million.

The agreement was born of concerns by the Federal Trade Commission in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance. The Walgreen Boots Alliance stated in their press release: “Walgreens Boots Alliance is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early calendar 2017.”

Fred’s Pharmacy Chief Executive Officer Michael K. Bloom, commented, “This will be a transformative event for Fred’s Pharmacy that will accelerate our healthcare growth strategy through our acquisition of 865 new stores located in highly attractive markets. We believe that this transaction will also create tremendous opportunities for both our new and existing front of store and pharmacy team members.”

Walgreens (Nasdaq: $WBA) shares hit $87.26 (+1.4%) on the news. Rite Aid (NYSE: $RAD) is up over 5% at $8.63. $FRED shares closed yesterday at $11.15. Today shares of $FRED have traded as high as $20.42.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Ticker Symbol FRED
Last Price a/o 11:09 AM EST  $             19.62
Average Volume 322,600
Market Cap $406.3 million
Sales $2.15 Billion
Shares Outstanding 36.44 million
Share Float 35.1 million
Shortable Yes
Optionable Yes
Inside Ownership 5.90%
Short Float 8.43%
Short Interest Ratio 9.16
Quarterly Return 14.96%
YTD Return -30.54%
Year Return -25.64%