Analyst Thinks Walgreen (WAG) Acquiring Rite Aid (RAD) 'Makes Sense'

Rite Aid Corp. (NYSE: RAD) is higher Wednesday following a Credit Suisse note reconsidering a case for M&A in the retail pharma sector.

The analyst said he sees about a 33 percent chance of Walgreen (NYSE: WAG) acquiring Rite-Aid. Currently, trading at about $2, Credit Suisse sees a potential buyout price of $3 to $4 per share.

Further, the deal might see low antitrust barriers and a deal would help Walgreen protect reimbursement rates.

Amid the bullish M&A outlook, Credit Suisse maintained an Outperform rating a $2 price target on the stock. Shares are up about 8 percent on the session.

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