Rite Aid Corp., the third-largest U.S. drugstore chain, may consider buying some of Jean Coutu Group Inc.'s Eckerd stores should they be put up for sale, an analyst said.

The Camp Hill, Pennsylvania-based company may purchase Jean Coutu's Eckerd stores in the mid-Atlantic and southeastern U.S., Credit Suisse analyst Edward Kelly wrote in a note today. Kelly estimates the probability of such a deal at 25 percent, and said the likelihood would increase if Longueuil, Quebec- based Jean Coutu's financial situation ``deteriorates.''

Jean Coutu has struggled to integrate its $2.4 billion purchase of about 1,500 Eckerd stores in 2004 and renegotiated $1.7 billion in bank loans in March because of slower-than- expected profit growth. Rite Aid has said it will consider ways to add stores, including acquisitions, and Kelly said the company might contemplate an Eckerd bid ``at the right price.''

``Jean Coutu may be considering the sale of some Eckerd assets given the significant difficulty it has had digesting this large deal and its recent credit issues,'' wrote the New York-based Kelly, who has an ``outperform'' rating on Rite Aid.

Jean Coutu spokeswoman Helene Bisson declined to comment, saying the company does not respond to rumors. Rite Aid spokeswoman Karen Rugen said the company doesn't comment on any questions or speculations about mergers or acquisitions.

Jean Coutu Plans

Jean Coutu Chief Financial Officer Andre Belzile said in April that the company doesn't have plans to sell stores ``at this time.''

Shares of Rite Aid rose 8 cents to $4.43 at 12:41 p.m. in New York Stock Exchange composite trading. Its stock rose 1.6 percent in the past year before today. Jean Coutu's widely traded Class A shares rose 8 cents to C$12.09 in trading on the Toronto Stock Exchange.

Drugstore chains are growing either through buying up stores or building new ones to provide scale in order to handle new Medicare requirements. Last week, Walgreen Co., the largest U.S. drugstore chain, agreed to buy regional competitor Happy Harry's Inc. for an undisclosed amount.

The 729 Eckerd stores could be sold for $700 million to $800 million, Kelly estimated.

Overall, Rite Aid has about 3,320 stores, while Jean Coutu has about 2,175 locations in the U.S. and Canada.

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Josh Fineman in New York at jfineman@bloomberg.net.

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