Walgreens offers $2.8B to buy Longs Drug Stores
Walgreen Co made an offer late Friday to buy Longs Drug Stores Corp. for $2.8 billion, hoping to unseat a rival offer from CVS Caremark Corp that Longs had already accepted.
By Agencies |
NEW YORK: Walgreen Co made an offer late Friday to buy Longs Drug Stores Corp. for $2.8 billion, hoping to unseat a rival offer from CVS Caremark Corp that Longs had already accepted.
Walgreens said it would pay $75 a share in cash to buy the California-based Longs, besting CVS's price of $71.50 per share, also in cash, which was equivalent to about $2.7 billion. Either deal would also include the assumption of about $200 million in debt.
Walgreens CEO Jeffrey Rein said in a letter to Longs' board of directors that the company would prefer to negotiate with Longs directly but was also prepared to take the offer directly to the company's shareholders.
Rein also noted in the letter, which Walgreens disclosed in a press release late Friday, that Walgreens had expressed an interest in acquiring Longs earlier for $70 a share but never received due diligence materials from the company.
Earlier Friday, the largest shareholder in Longs said it opposed the deal with CVS and had identified four other potential buyers for the drug store chain, which operates mainly in California, Hawaii, Nevada and New Mexico.
Pershing Square Capital Management, which owns about 3 million shares of Longs, has previously said that CVS's bid didn't adequately value Longs' real estate holdings.
Walgreens said it would pay $75 a share in cash to buy the California-based Longs, besting CVS's price of $71.50 per share, also in cash, which was equivalent to about $2.7 billion. Either deal would also include the assumption of about $200 million in debt.
Walgreens CEO Jeffrey Rein said in a letter to Longs' board of directors that the company would prefer to negotiate with Longs directly but was also prepared to take the offer directly to the company's shareholders.
Rein also noted in the letter, which Walgreens disclosed in a press release late Friday, that Walgreens had expressed an interest in acquiring Longs earlier for $70 a share but never received due diligence materials from the company.
Earlier Friday, the largest shareholder in Longs said it opposed the deal with CVS and had identified four other potential buyers for the drug store chain, which operates mainly in California, Hawaii, Nevada and New Mexico.
Pershing Square Capital Management, which owns about 3 million shares of Longs, has previously said that CVS's bid didn't adequately value Longs' real estate holdings.
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Speaking in a television interview Friday, CVS Chief Executive Tom Ryan said the company does not intend to raise its bid. ``We think we are paying a full and fair price,'' he said. ``We're not moving. We're done.'' A spokesman for CVS didn't immediately return a call late Friday seeking comment, and a spokesman for Longs wasn't available for comment.Download
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