Fred's Stock Plunges After Deal To Buy Some Rite Aid Stores Was Terminated

Shares of Fred's Inc. plunged 27% in premarket trade Thursday, after the agreement to buy 865 Rite Aid Corp. was terminated. The agreement was originally announced on Dec. 20, 2016. The termination comes after Rite Aid agreed to sell 2,186 stores to Walgreens Boots Alliance Inc. , which also terminates the companies' merger agreement. Fred's said it will receive a $25 million termination fee. "This is a disappointing outcome; however, the termination of the transaction has no impact on the Company's transformation strategy or our ability to execute," said Chief Executive Michael Bloom. The pharmacy and general merchandise chain's stock selloff puts it on track to open at the lowest level seen since Nov. 16, 2016. The stock had tumbled 34% year to date through Wednesday, while the S&P 500 had gained 9.0%.