Rite Aid shares tumble as FTC block is seen

Shares of drugstore chain Rite Aid fell 15 percent on Friday on a report that indicated its proposed merger with Walgreens Boots Alliance was having trouble winning antitrust approval from Washington regulators.

Rite Aid shares closed at $3 after hitting a 52-week low of $2.93 earlier in the day.

The Federal Trade Commission’s staff is prepared to recommend that the agency file a lawsuit to stop the $9.7 billion deal, according to a report in Capital Forum.

A final decision on a lawsuit would be made by FTC acting Chair Maureen Ohlhausen, a Republican, and Commissioner Terrell McSweeny, a Democrat.

The FTC staff has asked companies and groups concerned about the deal for depositions and affidavits that could be used in a lawsuit aimed at stopping it, The Post reported on May 16. The FTC confirmed that development to Reuters on Friday.

Walgreens, Rite Aid and the FTC all declined comment.

The merger would create the country’s largest drugstore chain — leapfrogging CVS Health Corp.

Walgreens has indicated it may sell as many as 1,200 stores to Fred’s, a smaller, regional chain, as a way to resolve antitrust problems under the proposed merger.

David Balto, a former FTC official, said the agency would have a “compelling case” if it sued to stop the deal and noted that the agency had stopped other big transactions, including a bid by Staples to buy Office Depot, which was scrapped last year.

Rite Aid and Walgreens have been waiting for FTC approval since Walgreens made its initial offer in October 2015.

The deal would help Walgreens widen its US footprint and negotiate for lower drug costs.