Walgreens Boots Alliance Inc has been exploring whether to go private following ...
) has been exploring whether to go private following private equity interest in the U.S drug store chain, which has a market value of more than $55 billion, according to people familiar with the matter.
Walgreens has tasked investment bank Evercore Partners Inc with exploring whether a transaction can be put together, the sources said, cautioning that a deal is far from certain. Walgreens Chief Executive Stefano Pessina, who is the company’s largest shareholder with a 16% stake, could roll his equity into the deal to help finance the transaction, one of the sources said.
Walgreens shares rose 8% to $64.12 in New York after Reuters was first to report the news on Tuesday. It later gave back some of those gains and was up about 3%. The stock had lost 28% of its value in the last 12 months, compared to a 13% rise in the S&P 500 Index .INX.Last week, it warned it did not expect its adjusted earnings to grow in fiscal 2020 because of the low reimbursement rates for prescription drugs, especially generics, and competition from online retailers such as Amazon.
“Given poor industry fundamentals, seemingly never-ending margin pressures faced in the healthcare supply chain, and, let’s face it, ongoing uncertainty about unpredictable items such as opioids exposure, we would struggle to see a monster premium beyond this current run-up ,” Baird analyst Eric Coldwell wrote in a note.Walgreens’ approach toward alliances and joint ventures stands in stark contrast to the strategy of rival CVS health Corp , which acquired U.S.
FILE PHOTO: A sign rests on a counter at a Walgreens pharmacy store in Austin, TX, U.S., March 26, 2018. REUTERS/Mohammad Khursheed
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