Walgreens to settle Rite Aid investors' merger claims for $192 million (updated)

Rite Aid

19/10/2023 21:20

(Adds shareholder lawyer comment in paragraph 3, Walgreens
declining to comment in paragraph 4)
       Oct 19 (Reuters) - Walgreens Boots Alliance  WBA.O  has
agreed to pay $192.5 million to settle a class action lawsuit by
investors in Rite Aid  RADCQ.PK  who accused Walgreens of
misleading them in 2017 about scrutiny of the two drugstore
chain operators' then-pending merger.
    The deal filed in Pennsylvania federal court on Wednesday is
subject to approval by District Judge Jennifer Wilson.
    David Knotts, an attorney for the shareholders, said the
case was "intensely fought." "We're very pleased with the result
and look forward to the court's review," he said.
    A spokesperson for Walgreens declined to comment.
    The Rite Aid investors sued Walgreens and its executives
over statements they made about the proposed merger between the
two major U.S. pharmacy chains, which was first announced in
2015.
    The lawsuit accuses Walgreens of downplaying scrutiny from
U.S. antitrust regulators starting in October 2016. 
    Walgreens ultimately scrapped the takeover plan in June 2017
after failing to win approval from the Federal Trade Commission.
    Walgreens, which operates stores under its own name as well
as Boots stores in Britain and Duane Reade stores in the United
States, instead bought around 42% of Rite Aid's existing stores
that year for $4.38 billion.
    The settlement with investors comes on the heels of Rite Aid
filing for bankruptcy protection as it struggled with high debt
and costs from opioid litigation. 
    Under the current proposed bankruptcy plan, the company's
shares would be dissolved with no compensation to shareholders.

 (Reporting by Jody Godoy in New York; Editing by Bill Berkrot)
 ((Jody.Godoy@thomsonreuters.com;))