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Rite Aid stock shoots up amid Walgreens acquisition rumors

Rite Aid finds itself at the center of acquisition rumors after comments last week by Walgreens Boots Alliance Inc. Acting CEO Stefano Pessina.

After Pessina said Walgreens is on the hunt for U.S. acquisitions as the health care system is shaken up by Obamacare, speculation by several stock analysts turned to Rite Aid as a fit for the company.

Walgreens has expressed an interest in buying Rite Aid in the past, Reuters reported.

“If Walgreens is in fact considering an acquisition now is the time,” wrote Brian Nichols, columnist/analyst for Motley Fool. “Rite Aid would be a terrific acquisition for Walgreens due to the extreme value presented in Rite Aid’s stock. In all likelihood, Walgreens could buy Rite Aid for far less than a 100% premium, probably a 40 to 60 percent premium, which only adds to the logic in Walgreens making this move.”

Walgreens last year bought the 55 percent of Alliance Boots it did not already own  in a cash and share deal worth about $15 billion to create a chain with more than 11,000 stores in 10 countries.

“The next big one will probably be in the U.S. because it is such a big market. It is a fascinating market,” Pessina said last week.

Rite Aid stock shot up 5 percent in the first three hours of trading today and is up nearly $1 since Friday, to about $8.30. Susan Henderson, senior vice president and chief communications officer for Rite Aid, did not respond to a request for comment on the Walgreens’ rumors.

Meanwhile, the East Pennsboro-based Rite Aid announced today it is joining with companies such as AT&T, ExxonMobil, Macy’s, Nationwide, Direct Energy and Hulu and American Express to launch Plenti, the first U.S.-based coalition loyalty program with well-known brands in which consumers can earn and use Plenti points for purchasing a wide range of products, regardless of the payment method.

The program will officially launch this spring and is expected to include more brands in additional categories. Recent research indicates that nearly three-quarters (72 percent) of Americans say they would prefer a rewards program that allows them to shop at many stores versus a single brand, Rite Aid said in a news release.

Plenti will give consumers options to earn points and additional value through special offers and product discounts. It will be free to join, and consumers can earn points and discounts using any form of payment accepted by the participating brands, including cash, prepaid and any debit, charge or credit card, the release said.

John Hilton

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