Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Rite Aid Corporation

Dec 22, 2015, 18:17 ET from Robbins Geller Rudman & Dowd LLP

SAN DIEGO, Dec. 22, 2015 /PRNewswire/ -- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") today announced that a class action has been commenced in the United States District Court for the Middle District of Pennsylvania on behalf of shareholders of Rite Aid Corporation ("Rite Aid") (NYSE: RAD) on October 27, 2015, in connection with the proposed acquisition of Rite Aid by Walgreens Boots Alliance, Inc. ("Walgreens") (the "Proposed Transaction").

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today.  If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Rite Aid, its Board of Directors (the "Board"), Walgreens and certain affiliates of Walgreens with violations of the Securities Exchange Act of 1934 ("1934 Act").  Rite Aid is a retail drugstore chain that sells prescription drugs and a range of other merchandise referred to as "front-end products."

On October 27, 2015, Rite Aid and Walgreens jointly announced that they had entered into an Agreement and Plan of Merger pursuant to which Walgreens will purchase Rite Aid for $9.00 per share in cash.  The Proposed Transaction is valued at $17.2 billion.

The complaint alleges that in connection with the Proposed Transaction, on November 23, 2015, defendants filed a materially false and misleading preliminary proxy statement on Schedule 14A (the "Proxy") with the SEC in violation of §§14(a) and 20(a) of the 1934 Act.  The Proxy, which recommends that Rite Aid shareholders vote in favor the Proposed Transaction, fails to disclose material information regarding the negotiation and approval of the Proposed Transaction and deprives the Company's shareholders of their right to cast an informed vote on the deal.  According to the complaint, the Proxy fails to disclose the following material information, which renders the statements in the Proxy materially false and/or misleading: (a) the terms of a certain alternate bidder's indications of interest; (b) the nature of the Board's financial advisor's conflict of interest; (c) management's financial forecast; (d) management's alternate forecast; (e) discussions regarding financial benefits to the Board and Rite Aid management; (f) discussions regarding management's equity rollovers; and (g) material metrics and assumptions underlying the financial advisor's valuation analysis.  Without this material information, the Company's shareholders cannot make an informed decision on how to vote their shares or whether to seek appraisal.

Plaintiff seeks damages and injunctive and equitable relief on behalf of holders of Rite Aid stock on October 27, 2015.  The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.

Robbins Geller, with 200 lawyers in ten offices, represents U.S. and international institutional investors in contingency-based securities and corporate litigation.  The firm has obtained many of the largest securities class action recoveries in history and was ranked first in both the amount and number of shareholder class action recoveries in ISS's SCAS Top 50 report for 2014. 

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SOURCE Robbins Geller Rudman & Dowd LLP