The Albertsons Company is planning on another stock option buy on the Rite Aid Corporation. It should be about five percent of the stock, with the rest currently being optioned by Walgreens Boots Alliance. The landscape of consumer shopping is shifting so rapidly that grocery chains need an in-house, name brand, pharmacy in order to survive the coming hurdles of both Walmart and Amazon’s move into these lucrative markets.
According to industry sources, Albertsons and Rite Aid should have a combined valuation of nearly 24 billion dollars, which includes structured debt. Rite Aid is considered a very hot commodity right now, what with its thousands of brick and mortar stores plus a health benefit management enterprise with over a million customers — their market value was recently set at around 2 billion dollars. They are in the process of selling approximately forty-five percent of their stores to Walgreens.
In the past several years Albertsons has aggressively pursued other grocery chains, including Safeway and nineteen other food markets. But now the proffered stock and cash deal would give shareholders a comfortable controlling interest in the new combined company — around 71%. Rite Aid would then remain with about thirty percent. Shareholder’s reps at Albertsons expect to see the new merger generate at least 83 billion dollars per year — if the closely held Albertsons goes public, which is what Cerberus Capital Management LP, the private equity company that currently controls Albertsons, will allow it. And with those kind of profits looming on the horizon, it appears very likely that it will occur. Cerberus attempted a public offering of Albertsons three years ago but withdrew the offer after market forecasts for the grocery industry turned sour for the giant Walmart grocery sector.