July 18, 2013 - 11:23 AM
LONGUEUIL, Que. - Jean Coutu Group (TSX:PJC.A) has sold its remaining shares of Rite-Aid Corp. (NYSE:RAD), ending the Quebec-based pharmacy chain's unsuccessful attempt to break into the U.S. market.
Jean Coutu says it will record a gain of US$94.1 million from the shares sold Thursday, on top of a gain of US$50 million announced for the sale of Rite-Aid shares in June.
The Montreal-area company received the Rite-Aid stock in 2006 as partial payment for its American assets, which included 1,521 Eckerd drugstores and 337 Brooks pharmacies in the United States.
Jean Coutu also received US$1.45 billion cash from Rite-Aid in the 2006 deal, which was worth a total of $3.4 billion including the stock and $850 million of long-term debt assumed by Rite-Aid.
It later sold about 25 million Rite-Aid shares in 2011 — roughly 10 per cent of its overall holding at the time — and made several other sales of various sizes over the following years.
Jean Coutu announced Thursday that it had sold its last 65.4 million shares of Rite-Aid for an average price of US$2.95, or US$192.2 million. In June, it sold 40.5 million shares at US$2.75 each.
In 2004, Jean Coutu paid C$3.1 billion to buy 1,539 Eckerd drugstores from U.S. department store company J.C. Penney with plans to turn them around and give the Canadian company a larger base in the United States.
News from © The Canadian Press, 2013