Rite Aid Corporation (NYSE:RAD) saw its stock jump nearly 4% to $8.05 on Monday. It was Rite Aid stock’s highest level since late September on renewed confidence that Walgreens Boots Alliance Inc (NASDAQ:WBA) will get its Rite Aid buyout wish.
Since Donald Trump’s surprising victory, RAD stock has soared 23%. Investors are clearly placing their bets that a Donald Trump Presidency means the Walgreens Rite Aid merger will complete as planned.
However, there is some substance to this latest move. CTFN M&A Reporting cites sources at the FTC that staff members have been moved off the Walgreens Rite Aid merger and onto Valspar’s buyout of Sherwin-Williams. CTFN’s reporter Diane Alter considers this a good sign for RAD stock owners, and for Walgreens. She thinks it signals the deal will get done soon.
Ironically, Rite Aid stock owners will consider this a Trump trade. They will believe it’s a deal that got done because of Trump. However, Donald Trump’s tenure won’t begin for another month.
The FTC is making this decision under the Obama Administration, and unknown policy changes. This goes back to what we have said over, and over, and over again: The Walgreens Rite Aid deal was never in jeopardy! It will go through with no problems whatsoever.
Walgreens Rite Aid merger is going to happen
RAD stock owners might as well go ahead and plan their parade. The Walgreens Rite Aid merger is a reality. Not only does CTFN M&A Reporting have a terrific track record, but there was never any real regulatory risk.
With that said, BNL Finance is not even going to try and be humble about this. We called it, and explained with a dozen or so articles why Rite Aid stock was such a great merger arbitrage play.
We provided this information to the public and additional insight to our BNL Members. In fact, we will publish our “what to do with your RAD stock profits” article on Wednesday morning.
More than anything, our “victory” and RAD stock’s volatility over the last few months is more a case study into the psyche of retail investors than it is an assessment of risk vs reward. Fact is the Walgreens Rite Aid merger will soon be announced and many will kick their own ass for not seeing an opportunity that what was so clearly in their face.
Nonetheless, the BNL Portfolio profited; BNL Members profited; and while much of the upside in RAD stock has come and gone, there is still upside of nearly 12% in RAD stock. That difference between Rite Aid stock’s current price and Walgreens Boots Alliance’s buyout price still represents a good opportunity.
In fact, there are not too many investment opportunities in the market to offer 11.8% upside in such short time, not with the low risk of Rite Aid stock. In other words, it is still a good buying opportunity, just not like it was when BNL Finance said “buy RAD stock” before.