Well, the verdict is in on the proposed merger between Rite Aid (RAD) and Albertsons (ABS) and is a shellacking that RAD management tried desperately to avoid. There in lies a bright future for a stand alone Rite Aid and its equity price.

Some writers on Seeking Alpha and some in the media had wrongly concluded that the main issue with the merger was the low price offered to Rite Aid shareholders. That assessment is missing the forest for the trees. As both proxy advisory firms (Institutional Shareholder Services and Glass Lewis) pointed out, the main issue was the overwhelming conflict of interest involved in the deal.

ISS concluded that "It does not appear that Rite Aid shareholders would receive a fair ownership interest in the combined company, a concern heightened by potential conflicts of interest during the negotiation process and apparently reflected in the company’s under performance since the merger announcement"

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