A rough year for Rite Aid (NYSE:RAD) investors just keeps getting harder. Shares of the drugstore operator tumbled 11.38%, after reports surfaced that Walgreens Boots Alliance (NASDAQ:WBA) is considering forcing the Federal Trade Commission to vote on its pending acquisition of Rite Aid. It's a risky move, and the market's reaction suggests that investors don't think regulators would approve the deal if forced to deliver a verdict within 30 days.

Rite Aid stock has now plummeted 41% so far in 2017, a shocking fall for investors who figured they would be cashed out to the tune of $9 a share at some point this year. Now there are doubts that the deal will be completed, and even in a best-case scenario they won't be getting more than $7 a share.

A sign that reads "Helahty isn't a goal, it's a way of living."

Image source: Rite Aid.

Breaking down a deal before it breaks down

Walgreens announced its $17.2 billion deal for Rite Aid in late 2015. Having a drugstore giant buy a smaller yet still large and significant peer was always going to pose antitrust challenges, yet it was hard to fathom that the FTC would take at least 17 months to decide on the fate of the proposed pairing. 

As approval dragged, Walgreens agreed last last year that it would unload 865 Rite Aid stores, selling them off to Fred's (NASDAQ:FRED) in a $950 million side deal. The market was enthusiastic about the chances for the deal to be completed by the Jan. 27 deadline this year, explaining why Rite Aid's stock traded as high as $8.69 in late December. 

When regulators failed to clear the deal by the January deadline, Walgreens and Rite Aid renegotiated the terms of the deal, with the buyer having all the leverage in the negotiations. The new buyout price would be just $7 a share, and that's if it would have to divest no more than 1,000 stores. The price will be adjusted lower if Walgreens has to hand over more than 1,000 stores to Fred's or any other opportunistic buyer.

Taking a gamble 

The amended deal calls for the deadline to be extended to July, but Walgreens may not want to wait that long. The New York Post reported on Tuesday that Walgreens was considering updating its application to include that it has "certified compliance" -- a gutsy gambit that forces regulators to decide within 30 days under the assumption that it has presented all of the information necessary to make a decision. 

The FTC has taken a long time to decide this potential combination, but forcing its hand could be dangerous. Rite Aid investors are now left to ponder what the drugstore chain be worth if it has to continue as an independent entity.

The good news for shareholders is that the stock is trading lower than it was when the Walgreens deal was originally announced. Rite Aid stock was going for just above $6 the day before the acquisition was unveiled. However, Rite Aid has been operating as if it was going to be taken out by now. At least one analyst, Ross Muken at Evercore ISI, put out a note earlier this year, dictating that the stock could fall to $3.50 or less if the buyout falls apart. Rite Aid's fundamentals have been iffy in recent quarters, and the stock's trading level at above $6 in late 2015 could also have included hopes of a buyout.

The drama should end soon, though trading in Rite Aid will be volatile until that happens. After waiting 17 months to see this buyout play out, the next few months will dictate how this story ends.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.