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Rite Aid sells stake in Drugstore.com
Retail pharmacy giant Rite Aid has sold its stake in Drugstore.com, its online partner. On Monday, Rite Aid sold its remaining 6.8 million shares of Drugstore.com to a group of investors led by Melinda Gates, Kleiner Perkins Caufield & Byers, and Maveron Equity Partners, said Rite Aid and Drugstore.com representatives. The lead investors all had prior stakes in Drugstore.com, and each has at least one seat on the board of directors of the online pharmacy. The stock sale will not affect Rite Aid's relationship with Drugstore.com, said Kal Raman, the online pharmacy's chief executive.
"This is a stock transaction event," Raman said. "It's a positive thing for me that our board members are buying our stock at this price." Rite Aid sold the stock because it was the company's only outside investment, and the company wanted to focus on its core business, said Rite Aid spokeswoman Karen Rugen. "Our focus is on running a drugstore chain, not on running outside investments," Rugen said. Rugen didn't know at what price Rite Aid sold its shares, but she said the company "made money on its investment." Representatives for Gates, Kleiner Perkins and Maveron did not return calls seeking comment. Rite Aid bought 9.3 million shares of Drugstore.com stock in June 1999 for $7.6 million as part of a 10-year agreement between the companies. Under that deal, Drugstore.com took over Rite Aid's online pharmacy, and Rite Aid began promoting its online partner to its in-store customers. The deal was one of the first pairings of dot-com companies with the brick-and-mortar companies they were attempting to unseat. After holding on to its shares for more than two years, Rite Aid began selling its Drugstore.com stake in January, when it sold 1.4 million shares of Drugstore.com stock on the open market. The company sold 1.2 million shares of Drugstore.com last week. Drugstore.com shares closed regular trading on the Nasdaq national market up 54 cents on Monday at $2.64. As of last month, Kleiner Perkins owned about 10 million shares of Drugstore.com, according to regulatory documents filed with the U.S. Securities and Exchange Commission. Kleiner Perkins partners Brook Byers and John Doerr both sit on Drugstore.com's board of directors. Doerr also owns 1 million shares of Drugstore.com stock by himself. Maveron, co-founded by Starbucks founder Howard Schultz, owns 1.6 million shares of Drugstore.com stock. Maveron partner Dan Levitan is a member of Drugstore.com's board. Melinda Gates, wife of Microsoft Chairman Bill Gates, also sits on Drugstore.com's board and owns 25,000 options for Drugstore.com stock.
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