RAD - Rite Aid jumps 10% amid activist speculation

Rite Aid ( NYSE: RAD ) soared 10% after some speculation that the company could become an activist target.

Rite Aid remains on Dealreporter's activist watchlist with the shares down almost 50% this year, the publication said its in "Morning Flash" item. The piece highlighted that RAD's board nominees were overwhelming reelected at its annual meeting so the drugstore chain appears to be in good graces of its investors.

The activist speculation comes after Rite Aid ( RAD ) confirmed in late April that it previously rejected a non-biding proposal f rom Spear Point Capital Management to acquire the drugstore chain for $14.60/share, or about $815 million.

The Dealreporter also pointed out that RAD CEO Heyward Donigan said that the company's pharmacy benefits manager Elixir will continue to be part of RAD's growth story going forward. Some, including analyst George Hill at Deutsche Bank, have previously said the company should consider selling the Elixir business.

Last month, Rite Aid's price target was doubled at Deutsche Bank on undervalued PBM business.

Rite Aid ( RAD ) short interest is 21%.

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