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NEW YORK - Sources say Rite Aid Corp. has offered up to $4 billion in cash and stock to acquire the Eckerd drugstore chain, joining two competitors in a stiff battle to purchase the ailing retail operation, according to Reuters.
The bid joins two other takeover offers submitted last week: one by Canadian drugstore chain Jean Coutu Group and the other by CVS Corp. the No. 2 U.S. drugstore chain, and private investment fund Kohlberg, Kravis Roberts, the report said.
All three bids value Eckerd at around $4 billion -- below the original expectations of the company's parent, department store chain J.C. Penney Co., but still higher than some analysts believed the chain would garner.
Rite Aid, the No. 3 U.S. drugstore chain, was a surprise last-minute entry into the bidding war. With a market capitalization of only $3 billion and less than $300 million of cash on hand at the end of November, many did not believe the company had the financial wherewithal to pursue a bid.
But the Camp Hill, Pa.-based company was able to structure a tax-free transaction partially using its stock as currency, the report said.