Rite Aid Corp (RADCQ)

[Prudent Capitalist]

Sheeeesh!! That is nonsense. RAD's Directors did not mislead investors at all. The $9 proposed buyout tendered by Walgreens was a very high inflated premium price if, and only if WBA was able to acquire all of RAD's stores and locations. The value of the deal was far less when it became clear that the FTC was never going to allow WBA to get all of RAD's locations. So, then the first revised deal was for a partial acquisition of certain stores, with Freds taking the remainder of the stores, and that deal was valued in the range of $6.50 - $7.00 depending on how many RAD stores and locations WBA ultimately got. When it became clear that the FDA would not allow that deal either, the current deal materialized which was of far less value to WBA.

BUT, no one ever reasonably suggested RAD shares could possibly be worth any of those per share levels without the huge premium WBA was offering for all or most of RAD. And, it was widely discussed among analysts and commentators that without those deals RAD shares would fall back to these levels around $1.50.

Even at today's much lower share price in the $1.85 range, RAD shares are trading at 3 times Cash Flow and 2.7 times Book Value. In short RAD is worth far less without the original WBA deals.