Wall Street Breakfast Podcast: Rite Aid Files Chapter 11

Rite Aid

Justin Sullivan

Listen below or on the go on Apple Podcasts and Spotify

Rite Aid (RAD) files for Chapter 11 bankruptcy. (00:22) Albemarle (ALB) withdraws $4B offer for Liontown Resources (OTCPK:LINRF). (01:33) Sony (SONY) in talks for potential purchase of Disney’s (DIS) India business – report. (02:04)

This is an abridged transcript of the podcast.

Rite Aid (NYSE:RAD) has filed for Chapter 11 bankruptcy protection.

The drugstore chain released a statement on Sunday night noting that it had filed for bankruptcy in New Jersey.

In connection with this process, Rite Aid (RAD) has received a commitment for $3.45 billion in new financing.

According to a Bloomberg report, the Philadelphia-based company listed both assets and liabilities in the range of $1 billion to $10 billion in the Chapter 11 petition.

Reorg first reported in July that Rite Aid (RAD) was considering a Chapter 11 filing to address liabilities related to its opioid exposure.

In a separate press release on Sunday, Rite Aid (RAD) announced the appointment of Jeffrey S. Stein as chief executive officer, chief restructuring officer and a member of the company’s board, effective immediately. Stein succeeds Elizabeth Burr, who has served as Interim CEO since January. Burr will continue in her role as a Director on the Company’s Board.

With Rite Aid’s bankruptcy filing, it joins drugmakers Mallinckrodt (OTC:MNKTQ), Endo (OTC:ENDPQ), and Purdue Pharma, which declared bankruptcy due to opioid litigation.

Rite Aid (RAD) short interest is 33.5%.

Albemarle (NYSE:ALB) has withdrawn its non-binding offer for lithium miner Liontown Resources (OTCPK:LINRF).

Albemarle (ALB) also withdrew its offer to Liontown’s board of directors, according to a statement on Sunday.

Albemarle (ALB) noted “growing complexities” with the proposed transaction as a factor in its decision.

The decision to abandon the Liontown (OTCPK:LINRF) offer comes after the lithium miner on Sept. 11 granted Albemarle (ALB) four weeks to look over its books following a takeover proposal valuing it at ~US$4.2 billion. Last week, Liontown gave Albemarle an additional week.

Sony Group (NYSE:SONY) has started talks with Walt Disney (NYSE:DIS) about a potential purchase of its Indian business.

Sony’s Sony Pictures Entertainment has initiated talks with Disney (DIS) as part of a contingency plan for its planned acquisition of India’s Zee Entertainment.

According to a report in The Mint, which cited people familiar with the matter, Sony has faced obstacles completing the deal since it announced the purchase almost two years ago.

Disney (DIS) declined to comment to The Mint.

The latest report comes after Bloomberg reported earlier this month that Disney is said to be holding talks with a number of different partners about selling its streaming and television businesses in India.

Reuters also reported last week that investment management giant Blackstone (BX) is in preliminary talks to buy a stake in Disney’s (DIS) India division.

Disney’s (DIS) Indian operations have suffered significant losses over the past year due in part to losing streaming rights of air cricket, a popular sport in India.

Other articles to look out for on Seeking Alpha:

Crypto meets luxury: Ferrari confirms it will accept bitcoin and ethereum for car payments

Carl Icahn claims his short bet against malls may be rigged – report

Earnings week ahead: Tesla, Bank of America, AT&T, Netflix, American Airlines and more

On our catalyst watch for the day,

  • The three-day WSJ Tech Live event will include presentations by the CEO’s of OpenAI, Roblox (RBLX), and Arm Holdings (ARM).

  • The post-IPO quiet period ends on a number of stocks to set up the potential for share price moves as analysts weigh in. Watch for ratings on Instacart (CART), Klaviyo (KVYO), MDB Capital (MDBH), SR Bancorp (SRBK), and Davis Commodities (DTCK).

U.S. stocks on Friday ended mixed.

However, the S&P 500 (SP500) posted back-to-back weekly gains.

The Nasdaq (COMP.IND) slipped 1.23%. The S&P (SP500) declined 0.50%, while the Dow (DJI) finished higher by 0.12%.

For the week, the S&P (SP500) was up 0.45% and the Dow (DJI) was up 0.79%. The Nasdaq (COMP.IND) retreated 0.18%.

Of the 11 S&P sectors, six closed in negative territory on Friday, led by Tech and Consumer Discretionary.

Energy topped the gainers, as WTI crude oil futures (CL1:COM) jumped nearly 6%.

Financials eked out gains, amid overall positive sentiment in the sector after the Q3 earnings season was kicked off by reports from JPMorgan (JPM), Citigroup (C) and Wells Fargo (WFC).

Bank of America (BAC) and Goldman Sachs (GS) will round out the major banks on Tuesday.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is up 0.3%, the S&P 500 is up 0.1% and the Nasdaq is down 0.1%. Crude oil is up 0.1% at more than $87 a barrel.

In the world markets, the FTSE 100 is up 0.3% and the DAX is down 0.1%.

The biggest movers for the day premarket: Lululemon Athletica (NASDAQ:LULU) is up more than 5% with the company set to join the S&P 500 index, effective Oct. 18. Manchester United (NYSE:MANU) is down more than 11% after the Qatari group bidding for the soccer club withdrew its offer of more than £5B ($6.1B).

On today’s economic calendar, the Fed’s Patrick Harker is scheduled to speak twice today. At 10:30 am he speaks on the economic outlook before the Mortgage Bankers Association Annual Convention & Expo. And at 4:30pm Harker will speak virtually on the economic outlook before the National Association of Corporate Directors Webinar.

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