Rite Aid's stock rockets after the New York Post reported it rejected a buyout bid at a hefty premium
Shares of Rite Aid Corp. rocketed as much as 38.5% intraday before paring gains to be up 18.7% in very active afternoon trading Wednesday, after the New York Post reported that the drugstore chain rejected earlier this month a buyout bid that valued the company at more than $800 million. Trading volume swelled to about 16 million share, compared with the full-day average of about 4.3 million shares. On March 30, private-equity firm Spear Point Capital Management said it would pay $14.60 for each Rite Aid shares outstanding, the New York Post reported, citing Spear Point co-Founder Ron Bienvenu. That represents a 56.0% premium to the March 30 closing price of $9.36, and a 97.3% premium to Tuesday's closing price of $7.40. After Rite Aid followed by rejecting the bid, Spear Point's Bienvenu told the NYP that the firm is considering a hostile tender offer directly to shareholders. The company's market capitalization is currently about $489.8 million. Rite Aid's stock had closed at a 2 1/2-year low of $6.99 on April 7, which was a week before the company reported a wider-than-expected fiscal fourth-quarter loss. The stock has tumbled 40.2% year to date, while the S&P 500 has slipped 6.3%.
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