Rite Aid says takeover offer ‘not credible’

Rite Aid Corp. has closed the door on a takeover bid.

The pharmacy retailer on Thursday said it rejected a takeover bid from  private-equity firm Spear Point Capital Management, saying the offer "was not credible and did not warrant further exploration."

Rite Aid confirmed the bid in a statement released the day after the New York Post reported that the chain had “quietly rejected”  an offer from Spear Point to buy the chain on March 30 for $14.60 a share, or $815 million, which represented a 56% premium to its closing price that day. According to the report, Spear Point is considering launching a hostile tender offer directly to shareholders.

Rite Aid operates 2,400 retail pharmacies across 17 states. It reported revenue of $6.065 billion for its most recent fiscal year, up from $5.917 billion in the previous one.

In its statement, Rite Aid said  that the Spear Point proposal proved no evidence of financing, required multiple months of exclusivity and called for the retailer to spend months soliciting competing offers. It also said the private equity firm had no track record has no track record of acquiring public companies “the size and complexity of Rite Aid.” 

"In addition, Spear Point's proposal was conditioned on none of the Company's debt becoming due and payable upon a change in control, which contradicts the terms of nearly all of Rite Aid's debt instruments," the retailer said.

Rite Aid said it remains focused on executing its growth strategy through continued leadership as a full-service pharmacy company, and will, as always, “be responsive to credible proposals that will enhance stockholder value.”

[Read More: Rite Aid shuffles management team; eliminates COO role]