Walgreens submits letter to Longs board of directors urging merger talks

DEERFIELD, Ill. Walgreens this week has expressed its disappointment with the Longs Drug Stores board of directors for refusing to discuss details of a merger proposed by Walgreens in August.

In particular, the Walgreens letter refutes Longs’ claims that WAG would not be willing “to accept the inherent regulatory risks in connection with an acquisition of Longs.” Walgreens’ letter contests that the company is prepared to take on risks of the merger and has moved forward in obtaining the needed approvals for acquisition, such as approval from the Federal Trade Commission and support from Walgreens’ real estate representatives, experienced, Chicago-based Klaff Realty, to assist in ironing out any redevelopment or management issues relating to the properties.

Also, Walgreens asserted that Longs in previous talks has overstated potential regulatory concerns, and claimed that a Walgreens/Longs merger would result in a company with holdings of about 35 percent of retail pharmacy business in metropolitan U.S. markets.

Finally, Walgreens argued that its buyout offer of $75 per share in cash would be preferable to stockholders over CVS Caremark’s offer of $71.50 per share. In closing statements, WAG said that if Longs remained unwilling to discuss the details of a merger, it would take its offer directly to Longs stockholders.