WALNUT CREEK, Calif., and DEERFIELD, Ill. – Longs Drug Stores Corp. (NYSE: LDG) this morning said it will not enter talks with Walgreen Co. (NYSE, Nasdaq: WAG).
The California-based drugstore and pharmacy benefits management (PBM) company said its board of directors, “after careful consultation with its legal and financial advisors, determined not to furnish information to, nor have discussions and negotiations with, Walgreens.”
The Illinois-based pharmacy giant’s cash-and-debt “expression of interest,” valued at $75 per share, was announced on Sept. 12. (READ MORE) At the time, the Longs directors issued a statement urging shareholders to support the $71.50-per-share bid from rival CVS Caremark Corp. (NYSE: CVS). The Woonsocket-based company’s bid had been approved by the Longs directors a month earlier, and had cleared federal anti-trust hurdles four days before Walgreens announced its rival bid. (READ MORE)
In its statement today, Longs noted that “Walgreens has given no assurances that the expression of interest will result in a transaction with Longs – at the price set forth in the expression of interest or otherwise.
“Longs’ board of directors continues to recommend to its stockholders that they accept the tender offer by CVS Caremark.”
Factors cited by the Longs directors in their decision included: Walgreen “was not and is not now proposing to accept inherent regulatory risks”; it “has not presented a clear roadmap to completion”; it “is not proposing to compensate Longs stockholders for delays” that might arise; the rival bidder “assumes limited antitrust risk and does not provide comparable certainty of consummation to the CVS Caremark transaction”; and, most importantly, the Walgreen offer is “non-binding, conditioned on diligence and is not financed.”
Walgreen is “disappointed with the refusal of the Longs board to discuss our superior proposal,” company spokesman Michael Palin told the Associated Press today, adding that “we remain committed to pursuing our proposal.”
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.
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To learn more about Deerfield, Ill.-based Walgreen Co. (NYSE, Nasdaq: WAG) – operator of the Walgreens pharmacy and Walgreens Health Services, a provider of specialty pharmacy, mail service, home care and PBM services – visit www.walgreens.com.
