Drug Topics - October 6, 2008 - (Page 4) 4 DRUG TOPICS Oct. 6, 2008 www.drugtopics.com Of Interest to Pharmacists Longs rebuffs unsolicited Walgreens bid Alaina Scott L ongs Drugs declined an unsolicited $3 billion purchase offer from Walgreens to purchase Longs. Instead, the California-based chain of 521 stores plans to continue to move forward with an agreement to sell to CVS Caremark. On September 12, Walgreens announced that it had sent Longs an unsolicited nonbinding “Walgreens has given no assurances that the expression of interest will result in a transaction with Longs at the price set forth.” Longs spokesperson expression of interest, offering $71.50 a share, which was about $3.50 per share higher than the C VS of fer. On Sept. 17, a Longs spokesperson said that “a f ter careful consultation with its lega l and f inancia l advisors,” the corporation had decided not to enter into discussions or negotiations with Wa lgreens. Before rejecting the Walgreens offer, the Longs board of directors determined that Walgreens did not propose to accept regulatory risks, assumed limited antitrust risk, and conditioned its nonbinding, unfinanced offer on the results of due diligence. The board also concluded that Walgreens had not provided assurance of a sale comparable to the CVS offer, had not presented a clear roadmap to completion, and did not propose to compensate Longs stockholders for delays in completing the sale. “Walgreens has given no assurances that the expression of interest will result in a transaction with Longs at the price set forth,” the spokesperson said. “Longs’ board of directors continues to recommend to its stockholders that they accept the tender offer by CVS Caremark.” CVS chief executive Tom Ryan told Drug Topics in September that the Longs name will disappear by the end of 2009 everywhere but in Hawaii. CVS will retain the Longs brand there, where it is seen as a homegrown chain. Longs will be the 10th acquisition in the past decade for CVS and its second major purchase in California. The chain’s consolidated operating profit for fiscal 2008 was $164.6 million. “After consulting with our outside counsel, we estimate that the operating profit of the stores at risk of divestiture could easily exceed this number by a substantial margin, assuming a transaction is approvable,” Longs stated, adding that after a Longs-Walgreens transaction, the combined company would operate more than twice as many pharmacy counters in Northern California as Rite Aid, which would be the nearest remaining competitor. Founded in 1938, Longs eventually grew into a chain of hundreds of stores operating up and down the West Coast, as well as in Arizona, Colorado and Hawaii. In fiscal 2008, Longs recorded sales of nearly $5.3 billion. http://www.drugtopics.com
Table of Contents Feed for the Digital Edition of Drug Topics - October 6, 2008 Drug Topics - October 6, 2008 Medication Errors: What To Do When You Make An Error Longs Rebuffs Unsolicited Walgreens Bid Drug Topics - October 6, 2008 Drug Topics - October 6, 2008 - Drug Topics - October 6, 2008 (Page 1) Drug Topics - October 6, 2008 - Drug Topics - October 6, 2008 (Page 2) Drug Topics - October 6, 2008 - Medication Errors: What To Do When You Make An Error (Page 3) Drug Topics - October 6, 2008 - Longs Rebuffs Unsolicited Walgreens Bid (Page 4)
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