Rite Aid has received — and rejected — a buyout offer from investment firm Spear Point Capital Management, the drugstore retailer confirmed in a press release Thursday.
Rite Aid's board dismissed the off-market offer as not credible, determining that Spear Point "provided no evidence of financing, required multiple months of exclusivity and then called for Rite Aid to spend months soliciting competing offers," the company said.
Spear Point's offer also hinged on none of Rite Aid's debt coming due and payable upon a change in control, "which contradicts the terms of nearly all of Rite Aid's debt instruments," the company also noted, adding that "Spear Point has no track record of acquiring public companies the size and complexity of Rite Aid."
While not on the market currently, Rite Aid said in the release that it "will, as always, be responsive to credible proposals that will enhance stockholder value."
The offer valued Rite Aid at $3.6 billion, according to a press release from Spear Point's data valuation partner, Silverback United.
Silverback, according to the release, "made a preliminary determination that Rite Aid's data may have significant value that could exceed the equity value of the company," a finding that was key to the offer, the company said.
For the year ahead, Rite Aid issued guidance for adjusted EBITDA of $460 million to $500 million.
Prior to Rite Aid releasing its financials and guidance, Deutsche Bank analysts led by George Hill said that Rite Aid needs to generate roughly $400 million to $450 million to meet its operating needs and interest payments — to survive as a company, in other words.