$2B less? Walgreens, Rite Aid lower price of still-unfinished deal

Nathan Bomey | USA TODAY

Drug-store chain Walgreens reached a deal to lower the price it will pay for rival Rite Aid by at least $2 billion and to again extend their deadline to finish the deal by several months.

The retail tie-up has languished in limbo for more than 15 months as the chains have sought to appease regulators by selling off certain stores in markets where they have competitive overlap.

The price, originally pegged at about $9.4 billion, now ranges from $6.8 billion to $7.4 billion.

The revised deal sent Rite Aid shares (RAD) plummeting more than 16.7% to $5.77 in pre-market trading Monday, as investors realized they would receive less value for their stock. Walgreens parent Walgreens Boots Alliance's shares (WBA) ticked up 0.3% to $81.74.

In the new agreement, the acquisition price is pegged to the number of stores Walgreens is required to sell off to win regulatory approval. The company had originally agreed to offload 1,000 locations but now may sell up to 1,200.

The new deadline for the deal is July 31. It was originally supposed to close in the second half of 2016.

Earlier this month, the company told investors the deal was "on track" to close in early 2017, Mizuho Securities analyst Ann Hynes said in a research note.

The new price is pegged at a minimum of $6.50 per share if the company is required to sell off 1,000 or fewer locations. It's set at between $6.50 and $7 if it's required to sell off 1,000 to 1,200 locations. And it's set at $7 if the company is required to sell off 1,200 stores.

The deal is down from an original price of $9 per share.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.