The mood in the management suites at Fred's (NASDAQ: FRED) is said to be grim ahead of tomorrow's long-awaited FTC vote on the Rite Aid (NYSE: RAD)/Walgreens Boots Alliance (NASDAQ: WBA) deal, according to several sources. If the deal is approved, Fred's status in the pharmacy world moves up significantly. As part of the deal, the two companies have agreed to sell Fred's 865 stores, which would make it the third-largest drug store chain. However, despite recent reports to the contrary, FTC approval is a long shot and now the company is preparing for the worst.

Today, Fred's adopted a short-term shareholder rights plan "in anticipation of substantial trading activity" ahead of the FTC vote.

"They are not taking out the plan because they think their stock will go up tomorrow," one source said.

A worst-case scenario for Fred's would be the FTC sues to block the deal and Walgreens doesn't fight back. A better case scenario would be the FTC sues to block the deal and Walgreens fights back, which StreetInsider recently reported there are signs of. The best-case scenario is an outright clearing of the deal.

The FTC's two commissioners have scheduled a closed door meeting tomorrow, June 29th, at 10:00AM ET, where it is widely expected they will vote on the deal.