Walgreens, Rite Aid Push Back Merger Deadline
October 20 2016 - 8:50AM
Dow Jones News
Walgreens Boots Alliance Inc. and Rite Aid Corp. said Thursday
they had extended the deadline to complete their merger as the
companies work to obtain regulatory approval.
The move came as Walgreens posted an increase in profit in its
fiscal fourth quarter as revenue edged higher.
The companies now expect the deal to close in early 2017 after
extending the merger agreements deadline from October 27 to January
27. Last October, Walgreens agreed to buy Rite Aid for about $9.4
billion. In September, Walgreens said it would divest more of its
stores than previously expected to help satisfy the Federal Trade
Commission's review.
Walgreens said Thursday it remains actively engaged with the FTC
and believes it will be able to divest between 500 and 1,000
stores, as required by the FTC, by the end of the year.
Shares of Rite Aid rose 3.2% to $6.87 in premarket trading.
The Deerfield, Ill., also said Thursday that overall sales at
stores open at least a year fell 0.3% in the fourth quarter, due to
lower sales of consumables and seasonal items, partially offset by
sales in the health, wellness and beauty categories.
During the quarter, Walgreens reported a profit of $1.03
billion, or 95 cents a share, up from $26 million, or 2 cents a
share, a year earlier. Excluding a swing in the value of warrants
exercised to buy a stake in AmerisourceBergen Corp. and other
items, per-share profit rose to $1.07 from 88 cents.
Revenue edged up 0.4% higher to $28.64 billion. Analysts
projected 99 cents in adjusted earnings per share on $29.06 billion
in sales, according to Thomson Reuters.
Walgreens said it expects $4.85 to $5.20 in adjusted earnings
per share for its new fiscal year. Analysts expect $5.02, according
to Thomson Reuters.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 20, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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