Walgreens Boots Alliance has agreed to pay $192.5 million to settle a class-action lawsuit brought by Rite Aid investors, alleging Walgreens misrepresented the regulatory risks of the pharmacy chains' merger plans that fell apart several years ago.
The settlement, filed Wednesday in U.S. District Court, Middle District of Pennsylvania, must be approved by the court, which will conduct a hearing next year.
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If approved, the settlement will apply to investors who bought Rite Aid shares between Oct. 20, 2016, and June 28, 2017. Court documents estimate an average recovery before fees of 22 cents per damaged share if all class members participate.
In late 2015 Walgreens announced plans to buy Rite Aid for $9.41 billion in cash. The companies scrapped the deal in mid-2017 due to pushback from federal regulators. Instead, Walgreens bought nearly 2,000 stores and three distribution centers from Rite Aid for more than $4 billion.
Rite Aid filed for Chapter 11 bankruptcy protection on Sunday, citing financial losses stemming from opioid-related lawsuits. The company has closed hundreds of stores in recent years and plans to close at least another 154 stores as part of the bankruptcy. Rite Aid has also agreed to sell pharmacy benefit manager Elixir Solutions to MedImpact for $575 million.
