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The $17 billion Walgreens-Rite Aid deal looks like it's in trouble

Shoppers walk by at the Walgreens' Times Square store in New York December 17, 2012. REUTERS/Andrew Kelly
Shoppers walk by at the Walgreens' Times Square store in New York December 17, 2012. REUTERS/Andrew Kelly

(Thomson Reuters)

Traders have lost faith in Walgreens' giant deal to buy Rite Aid.

Rite Aid's shares were sliding Wednesday after a report from the New York Post said the supermarket chain Kroger may no longer be interested in acquiring 650 stores from the two companies as part of that deal.

Walgreens and Rite Aid would have to sell the stores to gain antitrust approval for the deal.

Rite Aid's stock was trading around $6.70 Wednesday morning, well below the $9 a share Walgreens is offering for the company.

According to Bloomberg, that means traders see only an 18% likelihood that the deal will close.

There are other reasons for traders to be concerned. The Federal Trade Commission is likely to find the divestiture package insufficient, Bloomberg reported Wednesday, citing Capital Forum.

The regulator's concerns are related specifically to the pharmacy benefit management, according to the report.

Walgreens is scheduled to report quarterly earnings on Thursday. Shareholders will be looking for a material update on the deal.

Screen_Shot_2016 10 19_at_10_30_16_AM__2_
Screen_Shot_2016 10 19_at_10_30_16_AM__2_

(Investing.com)

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