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LONGUEUIL, Quebec — The Jean Coutu Group has sold more than 20% of its equity stake in Rite Aid Corp.
Jean Coutu said late Friday that it completed the sale of 56 million, or nearly 24%, of its 234.4 million common shares of Rite Aid.
The sale of the shares lowers Jean Coutu’s interest in Rite Aid’s outstanding common shares to 19.85%, the Canadian drug chain reported.
With the move, Jean Coutu’s number of representatives on Rite Aid’s board will decrease from three to two members, as stipulated in the companies’ stockholder agreement, according to Jean Coutu.
The shares were sold at an average price of $1.51 (U.S.) per share for a total of $83.6 million, net of related costs. Jean Coutu said a gain of $83.6 million will be recorded in its net profit for the first quarter of the 2013 fiscal year, since the carrying value of its investment in Rite Aid was previously written off.
Last July, Jean Coutu announced that it planned to sell about 10% of its equity interest in Rite Aid, filing a notice confirming its intent to dispose of about 25 million of its almost 252 million shares in the Camp Hill, Pa.-based drug chain.
Jean Coutu acquired a 32% common equity stake in Rite Aid through a $3.4 billion deal announced in August 2006, in which it sold Rite Aid its U.S. retail pharmacy subsidiary, including more than 1,850 Brooks and Eckerd drug stores. Under the agreement, Jean Coutu received received $2.36 billion in cash, subject to a working capital adjustment, and 250 million shares of Rite Aid common stock, which gave it 30.2% of the voting power in Rite Aid. The deal closed in June 2007.
