Fred's still bullish on Walgreens-Rite Aid deal
The new Fred's 8-K filing indicates that it has received the adequate financing to "fund the company’s proposed acquisition from Rite Aid of assets, including up to 1,200 retail stores, certain intellectual property, corporate infrastructure and distribution centers."
There have been reports that the FTC has concerns about Fred’s ability to buy the Rite Aid stores. But
“Looking ahead, we are focused on executing our key objectives for 2017, including diversifying and optimizing our assets to improve performance and cash flow,” Fred’s CEO Michael Bloom said in announcing the company’s first-quarter fiscal 2017 earnings. “In large part we are on track with the Fred’s 2017 plan, and doing exactly what we said we would do to optimize Fred’s Pharmacy’s business model and enhance value for our shareholders.”
Fred’s reported a net loss in the quarter of $36.5 million, or 98 cents a share, thanks in part to various charges totaling $45 million, or 92 cents a share. The charges included legal and related advisory fees related to the acquisition of Rite Aid stores. Sales were down 3% to $532.3 million in the first quarter.
If the FTC clears the transaction, Fred’s would become the third-largest pharmacy chain after Walgreens and CVS Health.
Meanwhile there have been reports that the FTC is preparing to file a lawsuit seeking to block Walgreen's $15 billion purchase of Rite Aid.