WOONSOCKET and WALNUT CREEK, Calif. – CVS Caremark Corp. (NYSE: CVS), having successfully completed its tender offer for Longs Drug Stores Corp. (NYSE: LDG) common shares, plans to complete its acquisition of the pharmacy chain by the end of the month.
“We are very pleased with the strong response to our tender offer,” CVS Chairman, President and CEO Thomas M. Ryan said in a statement yesterday. “Having now satisfied all closing conditions, we look forward to promptly purchasing the tendered shares and completing our merger with Longs.”
By the offer’s expiration Friday at 6 p.m., “a total of approximately 27,749,072 shares of Longs were validly tendered and not withdrawn,” CVS said. That represented about 76.51 percent of outstanding shares of Longs’ common stock, well above the threshold of two-thirds, or 66.67 percent, the Woonsocket-based company had set as a condition of its tender offer. (READ MORE)
“Accordingly, CVS Caremark has accepted for purchase all shares that were validly tendered during the offer,” the company said. Longs stockholders will receive $71.50 per share.
The acquisition is valued at $2.9 billion in cash and debt, the companies said in their August announcement. The transaction includes Longs’ 521 retail drugstores in Arizona, California, Nevada and Hawaii; an RxAmerica LLC subsidiary that offers pharmacy benefit management (PBM) services to more than 8 million members and prescription-drug plan benefits to about 450,000 Medicare beneficiaries; and the real estate associated with about 200 stores, three distribution centers and three offices.
The CVS deal has been strongly supported by the Longs’ board of directors, despite a rival “expression of interest” from Deerfield, Ill.-based Walgreen Co., which the board noted was non-binding, conditional and not financed. (NYSE, Nasdaq: WAG). (READ MORE) Its completion, “which will involve the purchase by CVS Caremark of the remaining shares not yet tendered by Longs shareholders, is expected to occur by the end of October,” the company said.
The second tender offer, for all remaining shares of Longs, will give shareholders until 6 p.m. Tuesday, Oct. 28, to receive the same $71.50 per share for their common stock. Unlike in the initial offer, CVS said, “shares will be purchased on a rolling basis, upon tender and acceptance.”
Meanwhile, “in accordance with generally accepted accounting principles (GAAP), the financial results of Longs will be consolidated into the financial statements of CVS Caremark immediately upon purchase of the tendered shares,” the company said.
The deal will bring total prescriptions filled or managed by CVS Caremark to more than 1.2 billion per year, and will grow its CVS/pharmacy retail division to about 6,800 drugstores in 41 states and the District of Columbia, the companies said last month, in announcing that the transaction had cleared federal anti-trust hurdles. (READ MORE)
CVS Caremark Corp. (NYSE: CVS) – the nation’s largest provider of prescription medications – operates the CVS/pharmacy stores; the CVS.com online pharmacy; Caremark Pharmacy Services; and the MinuteClinic retail-based health care subsidiary. Additional information is available at investor.cvs.com.
To learn more about Walnut Creek, Calif.-based Longs Drug Stores Corp. (NYSE: LDG) and its RxAmerica LLC pharmacy benefit management subsidiary, visit www.longs.com or www.RxAmerica.com.
