There's been another development in the planned Walgreens Boot Alliance and Rite Aid merger.
Even as media reports circulated Friday that the Federal Trade Commission was preparing to block the merger between Walgreens Boots Alliance and Rite Aid, one of the merger’s key players took steps to help strengthen the case to approve it. According to a Securities and Exchange Commission filing, Fred's Pharmacy secured additional financing Friday to meet its obligation of acquiring as many as 1,200 Rite Aid stores that are expected to be divested as part of the merger.
The company entered into a second amended and restated commitment letter with its lenders that increases the committed financing by $450 million, from $1.2 billion to $1.65 billion; extends the initial outside commitment date to July 31, 2017; and permits Fred's to further extend the outside commitment date to Oct. 31, 2017.
Another amended and restated commitment letter increases financing by $100 million, from $450 million to $550 million with similar extensions.
"Financing made available under the Second Amended and Restated ABL Commitment Letter and the Amended and Restated Term Loan Commitment Letter will be used to fund the company’s proposed acquisition from Rite Aid of assets, including up to 1,200 retail stores, certain intellectual property, corporate infrastructure and distribution centers," Fred's CFO and executive VP Rick Hans said.