(Reuters) - Drugstore chain Walgreens Boots Alliance Inc (WBA.O) said its deal to buy smaller rival Rite Aid Corp (RAD.N) would now take six months longer to close and also reduced its offer price as it expects to divest more stores to gain regulatory approval.

A Rite Aid logo is seen outside one of their stores in New York, April 11, 2013. REUTERS/Shannon Stapleton

The companies said on Monday they agreed to reduce the offer price to $6.50-$7.00 per share, valuing Rite Aid at $6.84 billion-$7.37 billion. Walgreens had offered $9 per share in October 2015 when it first proposed the deal.

Rite Aid shares closed down 17.5 percent at $5.72, easing slightly after hitting a two-year low of $5.70, on Monday. Walgreens ended 2 cents lower at $81.48.

Under the revised terms, Walgreens will now need to divest up to 1,200 Rite Aid stores, 200 more than earlier agreed. The deal is now expected to close on July 31, compared with the previous target of Jan. 27.

Walgreens had struck a deal in December to sell 865 stores to Fred’s Inc (FRED.O), but a Bloomberg report last week said the U.S. antitrust regulator was not satisfied with the plan.

“The one remaining uncertainty is who buys the incremental boxes as it is not clear to us that FRED has the financing capacity to do so,” Evercore ISI analyst Ross Muken said in a note.

Fred’s confirmed that the previously agreed deal remained in effect and said it continued to work with the Federal Trade Commission (FTC), Rite Aid and Walgreens to complete the deal.

Deerfield, Illinois-based Walgreens also cut its 2017 adjusted earnings forecast to $4.90-$5.08 per share from $4.85-$5.20. (bit.ly/2kjpNFu)

Walgreens said it would pay $7.00 per share if regulators required 1,000 stores or fewer to be divested and $6.50 per share for 1,200 stores, with the offer price being adjusted on a pro-rata basis for divestitures between 1,000-1,200 stores.

The six-month extension marks the second time Walgreens has pushed out the date by which it had expected to close the deal.

Walgreens Chief Executive Stefano Pessina said last week that the company was pressing on to close the deal with Rite Aid and was actively engaged in talks with the FTC.

Walgreens has 13,200 stores, nearly 60 percent of which are in the United States, while Rite Aid has 4,570 stores.</s>Concerns about regulatory approval have weighed on Walgreens Boots Alliance’s bid to buy a top drugstore rival, Rite Aid, as the two cut the price of the deal while pushing back the expected closing date by six months.

Shares of Rite Aid tumbled nearly 15 percent in morning trading on Monday, to $5.91.

In a joint statement on Monday, the retailers said that they would cut the price of the takeover to between $6.50 a share and $7 a share, potentially revaluing the transaction to as little as $6.8 billion. When the transaction was announced in 2015, Walgreens had agreed to pay $9 a share, or $9.4 billion.

The ultimate purchase price will be determined by how many more Rite Aid stores the combined company will sell to win antitrust approval above the 1,000 that Walgreens had previously agreed to. Under the new agreement, Walgreens said that it was willing to sell up to 1,200 stores.

Last month, Walgreens said that it planned to sell 865 stores to another drugstore operator, Fred’s.</s>Jan 30 (Reuters) - Walgreens Boots Alliance Inc said its deal to buy smaller rival Rite Aid Corp will now close six months later than expected and could include the divestiture of up to 1,200 stores to gain regulatory approval.

The companies also agreed to reduce the offer price to a range of $6.50 to $7.00 per share, from the initial offer price of $9 per share.

At the top end, the new offer is at a premium of 1 percent to Rite Aid's Friday closing price. (Reporting by Siddharth Cavale in Bengaluru; Editing by Shounak Dasgupta)</s>Jan 30 Walgreens Boots Alliance Inc said its deal to buy smaller rival Rite Aid Corp will now close six months later than expected and could include the divestiture of up to 1,200 stores to gain regulatory approval. The companies also agreed to reduce the offer price to a range of $6.50 to $7.00 per share, from the initial offer price of $9 per share.

Start the conversation, or Read more at Reuters.</s>The clock ran out again on Friday for the merger agreement between Walgreens Boots Alliance (NASDAQ: WBA) and Rite Aid (NYSE: RAD). The two large pharmacy retailers initially announced a proposed merger on Oct. 27, 2015, with the intention of closing the deal within 12 months. When it became apparent that the U.S. government would take longer to compete its antitrust review, the date was extended to Jan. 27, 2017. Now that date has come and gone, what happens next for Walgreens and Rite Aid?

As expected, Walgreens and Rite Aid took the easiest path in light of the still-going Federal Trade Commission (FTC) review of the proposed deal. The companies announced another extension of the merger agreement before the market opened on Monday. Now, the end date of the agreement is July 31, 2017.

This extension brought some unwelcome news for Rite Aid shareholders, however. Originally, Walgreens offered to buy Rite Aid for $9 per share. The amendment to the agreement that extends the end date lowers the offer price to a maximum of $7 per share and a minimum of $6.50 per share.

There is a range for the new offer price because the actual price paid will depend on how many Rite Aid stores Walgreens is required to sell. Walgreens initially planned to sell up to 1,000 stores. The company has increased the number of stores it's willing to sell to 1,200.

If the FTC requires Walgreens to sell 1,000 stores or fewer, the company will pay Rite Aid shareholders $7 per share. If Walgreens is required to sell the full 1,200 stores, Rite Aid shareholders will only receive $6.50 per share. If the actual number of stores sold falls in between those numbers, the price per share paid will be pro-rated.

Monday's announcement resulted in clear winners and losers. Rite Aid was definitely the biggest loser.The pharmacy chain's stock tanked on the news, opening around 17% lower than the previous close.

The Rite Aid stock plunge could have been worse. The maximum share price with Walgreen's revised offer is 22% lower than its previous offer. The minimum share price offer reflects a decrease of nearly 28% from the initial offer.

Walgreens emerged as a winner. The big pharmacy services company's stock traded slightly higher after the market opened. While Walgreens might have to give up more stores to get Rite Aid, it will pay a significantly lower price should the transaction win regulatory approval.

Probably the biggest winner of all, though, was Fred's (NASDAQ: FRED). Fred's stock jumped 6% in early trading following the announcement of the new details of the merger agreement. On Dec. 20, 2016, Walgreens and Rite Aid announced plans to sell 865 Rite Aid stores to Fred's to help convince the FTC to give a green light for the deal.

Reading the fine print of the initial agreement with Fred's explains why the company's stock rose after the announcement by Walgreens and Rite Aid. That agreementsays that if theFTCrequires Walgreens to sell more than 865Rite Aidstores, Fred's will purchase the additional stores. Fred's was already on track to become the third-largest pharmacy chain in the U.S. under the original terms. Now, it appears the company could grow even larger than it initially expected.

But what will the FTC do?

The $7 billion question now is: Will the FTC allow the deal to go through? At this point, that question remains unanswered.

My hunch is that the transaction will win approval. Walgreens' proposal to sell up to 1,200 stores should make it easier for regulators to decide in favor of the merger. Also, President Donald Trump will be able to nominate three new commissioners for the five-member agency. It seems likely that he'll put forward individuals who aren't proponents of heavy government regulation, which could help make an approval of the Walgreens-Rite Aid deal more likely.

How quickly the decision will be made is another question. I suspect that Walgreens and Rite Aid shareholders will know the fate of the merger prior to the new July 31 agreement end date. If not, anything could happen -- including the deal falling apart altogether.

10 stocks we like better than Walgreens Boots Alliance

 When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Walgreens Boots Alliance wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.</s>Walgreens on Monday substantially lowered its offering price for drugstore rival Rite Aid and, facing resistance from U.S. regulators, raised the number of stores it would be willing to unload to ease monopoly concerns.

The companies initially expected to sell no more than 500 stores, but that was pushed to 1,200 under the new terms.

The new offer for Rite Aid is between $6.50 and $7 per share, depending on how many stores need to be divested. When the deal was first announced in late 2015, Walgreens bid $9 per share, roughly $9.4 billion, for the nation's third-largest drugstore chain.

The lower price range would cut the deal's new value to between $6.84 billion and $7.36 billion, based on Rite Aid's roughly 1.05 billion outstanding shares.

The deadline to complete the deal, which had already been extended once and expired last week, was pushed back to the end of July.

Shares of Rite Aid Corp. tumbled $1.21, or 17 percent, to close Monday at $5.72.

The combination of Walgreens and Rite Aid would create a drugstore giant with more than 11,000 stores nationally, even with the sale of more than a thousand stores. That's a few thousand more than nearest competitor, CVS Caremark Corp.

Rite Aid, based in Camp Hill, Pa., runs nearly 4,600 drugstores. The addition of its locations is expected to give Walgreens more negotiating muscle with drugmakers and other suppliers and to grow its presence in the Northeast and Southern California.

Walgreens also has a sizable overseas presence, especially in the United Kingdom. It currently runs more than 13,000 stores in 11 countries, including 8,175 in the United States.

Walgreens said last December -- more than a year after announcing the Rite Aid deal -- that it would sell 865 stores to rival retailer Fred's for $950 million to address concerns raised by federal anti-trust regulators.

A Walgreens spokesman said Monday that the company still has an existing deal with Fred's, but he declined to comment on whether that company had agreed to buy more stores or if another potential buyer had emerged.

Under the revamped deal, Walgreens, based in Deerfield, Ill., will pay $6.50 per share for Rite Aid if it is required to divest 1,200 stores. The price rises to $7 per share if 1,000 or fewer are required.

Walgreens executives told analysts earlier this month that they still expected to close the deal. Executive Vice Chairman and Chief Executive Officer Stefano Pessina said Walgreens had a "very good" relationship with Federal Trade Commission representatives, and the company wasn't thinking of alternatives to the deal.

"We are working hard to have this deal approved and for the time being we don't want to even think that the deal could not be approved after so many months," he told analysts during a Jan. 5 conference call to discuss earnings.

Major deals have come under tough scrutiny because of the potential impact on consumers.

Last week, a federal judge rejected Aetna Inc.'s $34 billion bid for rival Humana Inc. on competitive grounds. The Department of Justice sued last summer to block that deal and a separate insurance acquisition, Anthem Inc.'s $48 billion purchase of Cigna Corp.

Walgreens also said Monday that it lowered the top end of its 2017 earnings forecast by 12 cents per share to account for the deal delay. Walgreens now forecasts adjusted earnings to range between $4.90 and $5.08 per share.

Analysts expect, on average, $5.02 per share, according to FactSet.

Shares of Fred's Inc. rose 1.3 percent to $14.29, while Walgreens Boots Alliance Inc. slipped 2 cents to $81.48, as broader indexes also fell.</s>WBA cuts acquisition offer by at least $2 a share

DEERFIELD, Ill., CAMP HILL, Pa. — Walgreens Boots Alliance (WBA) Inc. and Rite Aid Corp. have agreed to extend the end date for their merger deal and lower the offer price.

The companies said Monday that the deal end date has been moved to July 31 — after the previous extension expired this past Friday — to give them extra time to gain regulatory approval from the Federal Trade Commission.

Meanwhile, the revised price for WBA to acquire Rite Aid has been reduced to a minimum of $6.50 per share and a maximum of $7.00 per share, which would lower the cash portion of the transaction to approximately $6.84 billion to $7.37 billion, plus the assumption of Rite Aid’s debt. The original acquisition offer on Oct. 27, 2015, was for $9 per share and the assumption of over $7 billion in net debt, for a total deal value of $17.2 billion.

WBA also upped the number of stores that could be divested for antitrust clearance of the merger. The company said it will be required to divest up to 1,200 Rite Aid stores and certain other assets if necessary for regulatory approval. That would be 200 more stores than the up to 1,000 that WBA said it was willing to divest originally. WBA had initially said it expected to have to divest less than 500 stores but then in early September raised that figure to between 500 and 1,000.

The store divestiture total will affect the ultimate share price for the deal, the companies said. The price will be set at $7.00 per share if 1,000 stores or fewer are divested and at $6.50 per share if 1,200 stores are required for divestiture. If the required divestitures fall between 1,000 and 1,200 stores, the price per share will be adjusted pro rata.

Besides FTC approval, the amended agreement is subject to approval by Rite Aid shareholders as well as other customary closing conditions.

News of the reduced acquisition offer price sank Rite Aid shares on Monday. As of mid-morning trading, Rite Aid’s stock price was $5.90 after having closed at $6.93 on Friday. Save for some periods of volatility, Rite Aid shares have been hovering over the $8 mark during the antitrust talks with the FTC.

WBA’s shares were up slightly to $81.67 in mid-morning Monday trading after Friday’s close at $81.50. The shares also opened higher on Monday, at $82.

The weekend had passed without an announcement from WBA and Rite Aid boards about their status of their merger agreement, which had lapsed according to the timeline set by the companies. In late October, WBA and Rite Aid extended the end date for the deal to Jan. 27, 2017, from Oct. 27, 2016, and projected that the transaction would close in early calendar-year 2017. They originally said they expected to wrap up the merger by the end of calendar 2016.

“We’re actively engaged with the FTC and doing everything we can to support its work,” WBA executive vice chairman and chief executive officer Stefano Pessina told stockholders last Thursday at the company’s annual shareholders meeting. “We’re actively engaged in discussions with Rite Aid about how to put in place instruments and actions to facilitate the approval process,” he added.

A new wrinkle also may have appeared in the antitrust talks. Private equity firm Cerberus Capital Management, leader of the investment group that owns Albertsons, has thrown its hat into the ring as a potential buyer of the 865 Rite Aid stores that WBA and Rite Aid had agreed to divest to Fred’s Inc., the New York Post reported on Friday, citing anonymous sources.

In December, Fred’s agreed to buy 865 Rite Aid stores in a $950 million deal that was widely expected to pave the way for FTC approval of WBA’s acquisition of Rite Aid. Published reports have since said the FTC has expressed misgivings about the Fred’s deal, including whether Fred’s would be able to digest the purchase — which involves more stores than the 647 it currently operates — and become a viable operator in the drug store arena going forward.

If the WBA’s acquisition of Rite Aid eventually goes through, Walgreens would become the largest U.S. drug chain, with more than 12,700 stores in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. CVS Health is currently the nation’s largest retail pharmacy operator, with more than 9,600 CVS Pharmacy locations, including over 1,600 inside Target stores.

Pending the outcome of its Rite Aid store purchase, Memphis, Tenn.-based Fred’s would be in line to become the No. 3 U.S. drug store operator with 1,235 pharmacies, including 370 inside Fred’s discount stores.</s>Walgreens Boots Alliance and Rite Aid have agreed to revise their proposed merger, slashing the price per share and pushing the closing date back six months while they await regulatory approval.

The proposed merger, which was supposed to close Friday, is now scheduled to close July 31 to give the companies more time to get the thumbs-up from the Federal Trade Commission.

Walgreens also now will pay $6.50 to $7 a share for Rite Aid common stock, depending on how many Rite Aid stores must be divested. That's down from the $9 a share Walgreens originally agreed to pay.

Walgreens now will pay $7 a share if 1,000 or fewer stores have to be divested, and $6.50 a share if 1,200 stores must be divested.

Representatives of the FTC and Walgreens did not immediately respond to requests for comment Monday morning.

Walgreens announced in December that it would sell 865 Rite Aid stores to Fred's Pharmacy for $950 million to address FTC concerns about the deal. But Bloomberg News, citing unnamed sources, reported earlier this month that those divestitures hadn't satisfied the FTC.

Walgreens stock was up 0.5 percent to $82.03 and Rite Aid's stock was down 16.4 percent to $5.79 a share Monday morning after the announcement.

More to come.</s>Walgreens Boots Alliance Monday entered into a new agreement with Rite Aid to buy the drugstore chain for less money and potentially divest more stores.

The drugstore giant has been working win over regulators at the Federal Trade Commission in order to complete its Rite Aid acquisition. But the FTC so far has balked at a plan to divest 865 Rite Aid drugstores to Fred’s Inc. for $950 million.

“Under the terms of the amendment, the parties have agreed to reduce the price for each share of Rite Aid common stock to be paid by Walgreens Boots Alliance,” Walgreens said Monday. “The revised price will be a maximum of $7.00 per share and a minimum of $6.50 per share.”

In addition, Walgreens said it will be required to divest up to 1,200 Rite Aids “and certain additional related assets if required to obtain regulatory approval.” That means the specific price of the total Rite Aid purchase will be “be determined based on the number of required store divestitures, with the price set at $7.00 per share if 1,000 stores or fewer are required for divestiture and at $6.50 per share if 1,200 stores are required for divestiture.”

The announcement Monday comes after weeks of haggling with FTC lawyers on a way for Walgreens to buy Rite Aid. A merger agreement that expired Friday night to complete the transaction has now been extended from Jan. 27, 2017 to July 31, 2017 "in order to allow the parties additional time to obtain regulatory approval," Walgreens said.</s>REUTERS: Drugstore chain Walgreens Boots Alliance Inc said its deal to buy smaller rival Rite Aid Corp would now take six months longer to close and reduced its offer price, as it expects to divest more stores to gain regulatory approval.

Rite Aid shares fell as much as 17.8 percent to US$5.70 on Monday, while Walgreens shares rose slightly to US$82.23, after the companies pushed the deal close to July 31 from Jan. 27.

The companies said on Monday they agreed to reduce the offer price to US$6.50-US$7.00 per share, valuing Rite Aid at US$6.84 billion-US$7.37 billion.

Walgreens had initially offered US$9 per share, valuing the company at US$9.40 billion, in October 2015. (http://reut.rs/2kFULFa)

Under the revised deal, Walgreens would now need to divest up to 1,200 Rite Aid stores, 200 more than earlier agreed.

"The one remaining uncertainty is who buys the incremental boxes as it is not clear to us that FRED has the financing capacity to do so," Evercore ISI analyst Ross Muken said in a note.

Walgreens had struck a deal in December to sell 865 stores to Fred's Inc , but a Bloomberg report last week said the U.S. antitrust regulator was not satisfied with the plan.

Deerfield, Illinois-based Walgreens also cut its 2017 adjusted earnings forecast to US$4.90-US$5.08 per share, from its previous US$4.85-US$5.20 per share. (http://bit.ly/2kjpNFu)

Fred's shares rose as much as 7.9 percent to US$15.22.

Walgreens said on Monday it would pay US$7.00 per share if regulators required 1,000 stores or fewer to be divested and US$6.50 per share for 1,200 stores.

For divestitures between 1,000-1,200 stores, the offer price will be adjusted on a pro-rata basis, Walgreens said in a statement on Monday.

The six-month delay would be the second time Walgreens has pushed the deal closure date.

Walgreens Chief Executive Stefano Pessina said last week that the company was pressing on to close the deal with Rite Aid and was actively engaged in talks with the U.S. Federal Trade Commission (FTC).

Walgreens has 13,200 stores, nearly 60 percent of which are in the United States, while Rite Aid has 4,570 stores.
Walgreens Boots Alliance reduces its offer price for Rite Aid and defers the expected closing date by six months due to concerns about regulatory approval.