CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) announced today that its Board of Directors has approved a reverse stock split of the Company's common stock. The reverse stock split is intended to enable Rite Aid to regain full compliance with the New York Stock Exchange (NYSE) listing rules. The reverse stock split is subject to stockholder approval.
The Company plans to hold a Special Meeting of Stockholders, at which stockholders are being asked to vote on a proposal to adopt and approve the reverse stock split, at 8:30 a.m., local time, on March 21, 2019, at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP in New York. Rite Aid's Board has set February 5, 2019 as the record date for stockholders entitled to vote at the special meeting.
If stockholders approve the reverse stock split, Rite Aid's Board will select a reverse stock split ratio of either 1-for-10, 1-for-15 or 1-for-20 so that, depending on the ratio chosen, either 10, 15 or 20 shares of issued and outstanding common stock will convert into one share of common stock. The price of each common share is expected to increase so that a stockholder would have fewer but higher priced shares. A reverse stock split would not have any impact on the voting and other rights of stockholders, and will have no impact on the Company’s business operations or any of its outstanding indebtedness.
Even if the reverse stock split is approved by our stockholders, the Board of Directors may delay or abandon the reverse stock split at any time prior to the effective time of the reverse stock split, if the Board of Directors determines that the reverse stock split is no longer in the best interests of the Company or our stockholders.
As previously announced, Rite Aid will regain compliance with the NYSE share price listing rule if at the last trading day of any month during the six-month cure period, or at July 3, 2019, the end of the six-month cure period, the Company has at least a $1.00 share price and has maintained at least a $1.00 average closing share price over the preceding 30 consecutive trading days. Rite Aid’s common stock continues to be listed on the NYSE and will continue to trade as usual during the six-month cure period.
Rite Aid will file a preliminary proxy statement related to the special meeting later today. The Company expects to file and mail its definitive proxy material in due course. Rite Aid encourages stockholders to read the proxy statement and other material relating to the special meeting, as it contains important information. Stockholders may obtain a free copy of the proxy statement and other documents that the company files with the SEC at the SEC's website at www.sec.gov, or from the company by directing a request to Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011, Attention: Investor Relations, or at www.riteaid.com.
About Rite Aid Corporation
Rite Aid Corporation is one of the nation's leading drugstore chains with fiscal 2018 annual revenues of $21.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company's website at www.riteaid.com.
Important Notice Regarding Forward-Looking Statements
Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid’s intent to solicit approval of the proposal to effect a reverse stock split and an authorized share reduction, the timing of the reverse stock split, the potential benefits of a reverse stock split, including but not limited to continued listing on the New York Stock Exchange, the potential for a higher stock price and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements; general economic, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the pending sale of the remaining Rite Aid distribution centers and related assets to Walgreens Boots Alliance, Inc., including the possibility that the transactions may not close, or the business of Rite Aid may suffer as a result of uncertainty surrounding the pending transactions; risks resulting from the termination of the proposed merger with Albertsons Companies, Inc. (“ACI”), including the risk that the termination could have an adverse effect on Rite Aid’s ability to retain customers and retain and hire key personnel and maintain relationships with suppliers and customers and on our operating results and businesses generally; the risk of litigation related to the termination of the merger agreement with ACI or the proposed merger; and potential changes to our strategy following the termination of the proposed merger with ACI, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.