In a decisive move, a New Jersey bankruptcy judge granted Rite Aid the authorization on Tuesday to move forward with the acceptance of a $575 million bid for its Elixir prescription benefits program. The ruling follows revelations that the drugstore giant had not received any alternative offers during the proceedings.
MedImpact Emerges as Stalking Horse Bidder
During a concise court session, Rite Aid’s legal representatives informed U.S. Bankruptcy Judge Michael B. Kaplan that MedImpact, a prescription benefits plan operator, stood as the sole qualified bidder for the Elixir program. Describing MedImpact’s bid as the “only available option,” counsel Ross Fiedler highlighted the lack of competing offers.
Rite Aid Gets OK For $575M Sale Of Pharma Benefits Program: Rite Aid’s Chapter 11 Journey
Philadelphia-based Rite Aid Corp., along with several affiliates, sought Chapter 11 protection in October, unveiling a comprehensive plan and disclosure statement on Monday aimed at alleviating over $3 billion in debt. As part of this strategy, the company intends to close 150 retail locations and finalize the sale of Elixir.
MedImpact’s Dominance Despite Outreach Efforts
Despite Rite Aid’s claim of engaging with 36 potential bidders, the absence of qualifying bids by the December 18 deadline underscored MedImpact’s dominance in the bidding process. Fiedler clarified that MedImpact’s $575 million offer emerged as the preferred choice, substantiating it as the lone contender.
Rite Aid Gets OK For $575M Sale Of Pharma Benefits Program : Smooth Sailing Towards Sale
Fiedler assured that Rite Aid had successfully addressed all formal and informal non-cure objections to the sale order. Additionally, he emphasized unanimous support from creditor committees involved in the case, indicating a smooth trajectory towards finalizing the sale. Rite Aid aims to conclude the transaction in the first quarter of this year.
Future Milestones
A confirmation hearing for Rite Aid’s Chapter 11 plan is scheduled for the end of February, marking a pivotal step in the company’s ongoing restructuring efforts.
