Go to www.riteaidmerger.com or contact Chris Komatinsky or Andrew Bode
Los Angeles, CA -- (ReleaseWire) -- 05/23/2018 -- Rite Aid and Albertsons hosted a short notice, invite only, almost day long meeting with analysts last week. Based on the slides presented, it appears like an attempt to re-explain/re-spin the benefits of the two companies merging from the February 20 presentation with a lot more slides, slicker graphics and videos, and updated with the reported fourth quarter financial numbers. As we already knew, they'll be #5 in revenue and #1 by debt leverage in a competitive, low margin business.
It's unclear why this meeting with analysts was needed or what it accomplished since it is Rite Aid shareholders who have expressed dissatisfaction with the proposed merger. We encourage Rite Aid to schedule an open "Shareholders" day where we might get answers to questions like:
1. Albertsons is bringing a $4 Billion (That's a "B") unfunded, off balance sheet pension liability to this proposed marriage. It doesn't take a rocket scientist to know that this will require higher future pension contributions. How much of the projected synergy cost savings might these higher pension payments eat up?
2. An analyst today asked why a merger between a drug store and a grocery store made sense in today's market. There were several points made but we think Kermit Crawford's response where he stated that "and I think the key differentiator from the past is we're bringing this thing called EnvisionRxOptions, right, which now we have the ability to go out, attract lives and then push them into our stores" is the most relevant. Given that the PBM is the most significant driver of future revenue and profit growth, why are Rite Aid shareholders only getting 30% of the merged company equity?
3. Several parties were interested in deals involving the Rite Aid PBM prior to the recent flurry of Healthcare Integration deals. Doesn't this reduction in available Healthcare assets make the Rite Aid PBM more valuable?
4. Albertsons was able to pay its private shareholders a dividend as recently as last June. Why, if the combined companies are stronger, is the new company not projected to pay dividends for some time? Are Albertsons' private shareholders just using this merger with Rite Aid to cash out from their positions?
5. Albertsons appears to use an expensive company jet for its executives according to the S-4 registration statement. We were surprised to see this given the lessons from the corporate excesses of the 90's/00's. Is the merged company going to continue to use an expensive company jet or add this to the list of efficiencies that can be achieved?
We reiterate that we see a merger agreement that grossly undervalues the remaining Rite Aid assets and overvalues Albertsons assets and that raises the investment risks of Rite Aid shareholders by merging Rite Aid into a deeply indebted Albertsons entity (on and off balance sheet liabilities) that operates in a highly competitive food retailing business. See our prior press release (http://www.digitaljournal.com/pr/3770591) for more details.
One Rite Aid shareholder has set up a website, http://www.riteaidmerger.com, for further information and for shareholders with holdings of all sizes to note their intent to vote "Against" the proposed merger when proxies are sent out. Join hundreds of other individual investors and log your e-mail and shareholding in the table provided so we can send Rite Aid Management the message loud and clear.
Contact individual shareholder volunteers Chris Komatinsky (310-947-4507 or email@example.com) or Andrew Bode (970-765-8450 or firstname.lastname@example.org) if you have any questions or want to join the effort private
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Email: Click to Email Chris Komatinsky