RITE AID $28-PER-SHARE BID FOR ENTIRE BEGLEY OPERATION
RITE AID $28-PER-SHARE BID FOR ENTIRE BEGLEY OPERATION was approved by the Begley board on Feb. 29. "While we had hoped to continue operating the non-drug portion of Begley's business as an independent entity, the proposed $28 tender offer is so superior from a financial point of view to other available options that we have an obligation to our shareholders to endore it," Chairman Tracy Farmer stated. The improved Rite Aid bid comes close to its earlier $20 mil. offer for Begley's 43 drug stores and tops a $21 per share bid for all of Begley (drugstores and cleaners) by SupeRx of Arizona, Georgia and Alabama Corp. ("The Pink Sheet" Feb. 22, T&G-8). Rite Aid's "white knight" offer includes a merger agreement that, when complete, would make Begley a wholly-owned Rite Aid subsidiary. Begley stockholders that had not tendered their shares would then receive $28 for each share. In addition, the agreement also includes a lock-out provision through which Rite Aid could purchase "certain Begley drug stores to be selected at random in the event that an entity other than Rite Aid acquire[d] effective control of Begley." However, the fate of Begley may be determined in court. Rite Aid has sued SupeRx in a Kentucky circuit court, while SupeRx has filed a complaint against Begley in Lexington Federal Court. Under a proposal advanced the week of February 22, Rite Aid offered nearly $20 mil. for Begley's drugstore business and, as part of that deal, would have begun a $25 a share tender offer. That offer would have excluded two major Begley shareholders, Farmer and Steele Gregory, who would have continued to run Begley's 140 dry cleaning establishments and six home health centers ("The Pink Sheet" Feb. 29, T&G-10). There are approximately 660,000 shares of Begley stock outstanding. Begley noted in a March 2 release that on the day following approval of the Rite Aid transaction by the Begley board, the company received a proposal from SupeRx to amend its tender offer and increase the price to $29 a share. However, Phoenix-based SupeRx has yet to announce a formal offer. SupeRx had previously improved its initial $18.50 a share offer by $2.50 per share ("The Pink Sheet" Feb. 1, T&G-11).
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