Fred‘s stock rockets after $165 million deal to sell pharmacy files to Walgreens

Shares of Fred‘s Inc. rocketed 32% to pace all premarket gainers, after Walgreens Boots Alliance Inc. said it will pay $165 millio to buy pharmacy patient prescription files and related inventory from 185 Fred‘s pharmacies in 10 Southeastern states. Under terms of the deal, the Walgreens will also pay Fred‘s an amount equal to the value of related pharmacy inventory. The deal is part of Fred‘s previously announced plan to monetize non-core assets. Fred‘s said it will continue to operate the retail stores at most of the locations after the pharmacies close. Once the deal closes, Fred‘s will operate 162 pharmacies across nearly 600 stores. "With this agreement, we have taken a major step towards achieving one of our main goals of eliminating our debt balance," said Fred‘s Interim Chief Executive Joe Anto. Fred‘s stock has plunged 60% year to date through Friday, while Walgreens shares have slipped 6.1%, the SPDR S&P Retail ETF has rallied 14% and the S&P 500 has gained 7.4%.

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