Fred’s Pharmacy Comments on Extension to Merger Agreement

MEMPHIS, Tenn.–(BUSINESS WIRE)–Fred’s Inc. (“Fred’s Pharmacy” or the “Company”) (NASDAQ:FRED) today
issued the following statement regarding the agreement between Walgreens
Boots Alliance, Inc. (NASDAQ:WBA) and Rite Aid Corporation (NYSE:RAD)
under which Walgreens and Rite Aid have entered into an amendment and
extension of their previously announced definitive merger agreement:

Fred’s Pharmacy affirms that the asset purchase agreement it entered
into on December 19, 2016 with Walgreens and Rite Aid remains in effect.
As previously disclosed, to the extent the Federal Trade Commission
(“FTC”) requests that additional stores be sold, and Walgreens agrees to
sell such stores, Fred’s Pharmacy has agreed to buy those stores. The
amendment and extension of the Walgreens-Rite Aid merger agreement
reinforces the Company’s confidence that the transaction is in the
mutual best interest of Fred’s Pharmacy and all of its shareholders.
Fred’s Pharmacy continues to work with the FTC, Rite Aid and Walgreens
to complete the transaction, and looks forward to realizing the
considerable benefits the transaction will bring to customers, patients,
payors, supplier partners, team members and shareholders.

About Fred’s Pharmacy

Fred’s Pharmacy and its subsidiaries operate 647 discount general
merchandise stores and three specialty pharmacy-only locations in 15
states in the southeastern United States. Included in the store count
are 18 franchised locations. Also, there are 371 full service pharmacy
departments located within Fred’s stores, including four franchised
locations. For more information about the Company, visit Fred’s website

Forward Looking Statements

Comments in this news release that are not historical facts
are forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those projected in
the forward-looking statements. A reader can
identify forward-looking statements because they are not limited to
historical facts or they use such words as “outlook,” “guidance,” “may,”
“should,” “could,” “believe,” “anticipate,” “plan,” “expect,”
“estimate,” “forecast,” “goal,” “intend,” “committed,” “continue,” or
“will likely result” and similar expressions that concern the Company’s
strategy, plans, intentions or beliefs about future occurrences or
results. These risks and uncertainties include, but are not limited to,
those associated with the Company’s announced strategic plan, the
success of announced acquisition activities and future growth trends in
businesses acquired; general economic trends; risks related to the
possibility that the transactions may not close, including because one
or more closing conditions to the transactions, including certain
regulatory approvals, may not be satisfied or waived, on a timely basis
or otherwise, including that a governmental entity may prohibit, delay
or refuse to grant approval for the consummation of the transactions, or
may require conditions, limitations or restrictions in connection with
such approvals; the risk that the businesses and acquired stores, as
applicable, will not be integrated successfully; the risk of litigation
and/or regulatory actions related to the proposed transaction; changes
in consumer demand or purchase patterns; delays or interruptions in the
flow of merchandise between the Company’s distribution centers and its
stores or between the Company’s suppliers and same; a disruption in the
Company’s data processing services; cyber-security threats; costs and
delays in acquiring or developing new store sites; and the factors
listed under “Risk Factors” in the Company’s most recent Annual Report
on Form 10-K and any subsequent quarterly filings on Form 10-Q filed
with the Securities and Exchange Commission. Forward-looking statements
speak only as of the date made. Fred’s undertakes no obligation to
release revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unforeseen events, except as required to be reported under the rules and
regulations of the Securities and Exchange Commission.

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