Rite Aid in Trouble?

This just in from BizNewsPa:

Would-be Rite Aid buyer sees stark choice for company

Rite Aid can unlock the value of its data under new ownership -- or the pharmacy chain can continue on its current path and likely land in front of a bankruptcy judge.

  • That was the gist of a message delivered in a webinar yesterday by a private equity investor who is offering to buy the Camp Hill-based company.
  • "Without radical change, this is a bankruptcy waiting to happen," Ron Bienvenu, managing partner of New Orleans-based Spear Point Capital Management, said during the webinar, which was hosted on Twitter.

What's with the data: Bienvenu argued that data is a valuable asset in today's economy but it is undervalued.

  • He sees Rite Aid as something of a test case for his theory.
  • "We want to make a lot of money. Truth. But we also want to prove a point that data has real value," said Bienvenu, who also is CEO of a data company called Silverback United. "And if we're right, every company in the world is undervalued. Full stop."
  • He estimated that Rite Aid's data is worth between $500 million and $5 billion, a relatively wide range but greater than the company's current market value of under $370 million.
  • The market value of competitor CVS, by comparison, is more than $132.4 billion.

What's the value: Bienvenu declined to disclose exactly how he and Silverback would add value to Rite Aid. But he did float an example.

  • Rite Aid customers could provide DNA samples and the company could help monetize them.
  • "We could start to create income for our customers and we manage their health data for them and they could participate," he said.

What about the debt: Bienvenu said his offer accounts for Rite Aid's substantial debt load and that it would not pose an obstacle to a deal.

  • "We do understand their debt. We do understand their position," Bienvenu said. "Like I said, if we're right, this company could be worth a heck of a lot more money."

What's next: Bienvenu said yesterday he is prepared to attempt a hostile takeover, which he predicted would be relatively easy.

  • But he prefers the deal to proceed on friendly terms.
  • "We want this to be a win-win," he said, noting that he first approached Rite Aid in 2020. "Basically, we see a data-rich company that needs a strategy to win, not just survive."
  • Rite Aid is the right size for a target, he suggested. "It's a company that is big enough to matter but too small to win in its current form."
  • A larger, more successful company like CVS has less incentive for change, he added.
  • Rite Aid rebuffed Bienvenu's buyout offer in a statement last week. Asked about yesterday's presentation, a company spokesperson pointed to the earlier statement.
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