Rite Aid’s annual shareholders meeting today rang with criticism from some, but not nearly enough to stop the nine-member Rite Aid board from being re-elected for another year.
This morning’s meeting in Harrisburg comes close on the heels of a failed merger with Walgreens that sent Rite Aid’s stock price plummeting.
Less than a dozen shareholders spoke out during the meeting at the Hilton Harrisburg, but the vast majority were negative on the board and on Rite Aid’s management, mostly due to the doomed Walgreens deal and the resulting tanking of Rite Aid stock, which has been down to about $2.33 a share.
Still, the full slate of corporate board members was re-elected, mostly by proxy votes from shareholders who did not attend the meeting.
Initially, the Walgreens deal, struck in Oct. 2015, would have brought Rite Aid shareholders $9 a share.
That deal was renegotiated in January due to the number of Rite Aid stores that would have to be sold off to pass regulatory muster by the Federal Trade Commission, and the price to shareholders was downgraded accordingly, falling to $6.50 to $7 a share
But when the deal collapsed altogether last month, the stock price plunged into the $3 range. And it now trades around $2.35.
That can make for some angry shareholders, a few of whom vented at today’s meeting.
But the positive shareholders vote that re-elected the entire board was a win for Rite Aid Chairman and CEO John Standley, who has laid out a plan for a leaner and meaner Rite Aid going forward.
Rite Aid plans to sell 2,186 stores – about half of its locations – to Walgreens for $5.2 billion. Rite Aid plans to use most of the proceeds of the sale, along with a $325 million merger breakup fee – to pay down $7 billion-plus in debt that has been choking the company for years.
Going forward, company officials laid out a map that shows Rite Aid as a “bi-regional company,” with 577 stores in California and a total of 799 store in five western states.