Walgreens Boots Alliance (NASDAQ:WBA) Inc., the Deerfield, Illinois-based company, has agreed to a settlement of $192.5 million in a federal class-action lawsuit on Thursday. The case, Chabot v. Walgreens Boots Alliance, Inc. 18-cv-02118, was initiated by investors who alleged that they were misled about the potential approval of Walgreens' 2015 acquisition bid for Rite Aid (NYSE:US90274J5618=UBSS) Corp.
The investors claimed that misinformation led to an artificial inflation of Rite Aid's stock price, resulting in significant losses when the deal fell apart in 2017 due to antitrust issues. The settlement came after intense discussions and was overseen by US District Judge Christopher Conner, three weeks before the planned trial.
The original deal involved Walgreens' intent to acquire over 4,000 Rite Aid stores for $17.2 billion. After the failure of the merger due to antitrust concerns, Walgreens ended up purchasing only 1,932 stores for $4.4 billion.
Currently, Rite Aid is navigating Chapter 11 bankruptcy proceedings while managing a $4 billion debt and handling lawsuits associated with the opioid crisis. According to InvestingPro, Rite Aid operates with a significant debt burden and has been quickly burning through cash.
On the other hand, Walgreens Boots Alliance, despite the recent lawsuit, has shown some positive signs. The company has a revenue growth of 4.81% and a dividend yield of 9.04% according to InvestingPro Data. Furthermore, the company has maintained dividend payments for 53 consecutive years, a remarkable feat in today's volatile market, as per InvestingPro Tips.
However, the company's stock has taken a big hit over the last week, with a 1 Week Price Total Return of -12.15%. This is in line with one of the InvestingPro Tips that suggests the stock has taken a significant hit recently.
Investors interested in Walgreens Boots Alliance Inc. can find more detailed information and additional tips on the InvestingPro platform. The platform offers real-time metrics and tips to help investors make informed decisions.
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