On Monday, shares of retail drugstore chain Rite Aid RAD are tanking, down around 17% in afternoon trading after Walgreens Boots Alliance WBA said it would pay a lower price per share its pending acquisition of the company.
Under the new terms of the deal, Walgreens will pay a maximum of $7 per share and a minimum of $6.50 per share for Rite Aid stock. Back in October of 2015, the pharmacy behemoth agreed to purchase Rite Aid for $9 per share in cash.
In addition to the new lower price, Walgreens will also divest up to 1,200 Rite Aid stores, which is 200 more than the original agreement had specified, as well as "additional related assets if required to obtain regulatory approval," said Rite Aid in a statement .
This means that the total cost of the deal depends on the number of required store divestitures. Rite Aid explains that the price would be set at $7 per share if 1,000 stores or fewer are required for divestiture, or $6.50 per share if 1,200 stores are required for divestiture.
The deadline for the deal has been pushed back from January 27 to July 31. The agreement still sees Walgreens acquiring all outstanding shares of Rite Aid.
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