Rite-Aid Offers to Buy Revco
AKRON, Ohio (AP) _ Rite-Aid Corp. on Wednesday filed a plan to take over financially troubled Revco D.S. Inc.
Rite-Aid said the deal would provide about $440 million in cash to Revco’s long-time creditors, make Rite-Aid responsible for some other Revco debts and distribute Rite-Aid stock instead of cash to the company’s newer creditors.
Few other details of the plan were available. It was filed late Wednesday afternoon in U.S. Bankruptcy Court here.
Shiremanstown, Pa.-based Rite-Aid said it believed its plan for cash and stock distributions would provide higher and more certain value for creditors than other plans filed so far.
Revco officials couldn’t immediately comment on the plan.
″We have heard that a plan was filed late this afternoon, but we have not seen it and don’t know anything about it,″ Revco spokeswoman Diana Lueptow said Wednesday evening.
Revco, whose privately-held parent company is based in Twinsburg, asked for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in July 1988.
Creditors last week rejected a takeover plan filed by Florida-based Jack Eckerd Corp., a rival drug store chain. Revco said then committees representing three groups of creditors they would pursue their own plan for reorganizing Revco’s finances and that Revco would support them.
Under its plan, Eckerd would have taken over Revco by issuing nearly $970 million in debt securities to buy Revco. Privately-held Eckerd also planned to issue about 200 million shares of stock and set aside the proceeds to retire some of the debt.
Revco operates 1,150 stores in 10 eastern states.
Rite-Aid operates 2,440 stores in 22 eastern states and operates several auto parts stores, bookstores and dry cleaning stores.