Walgreens Boots Alliance sells shares of AmerisourceBergen
Walgreens Boots Alliance announced on Aug. 3 that it has sold shares of AmerisourceBergen common stock pursuant to prepaid variable share forward transactions executed through a registered public offering for current proceeds of approximately $1.6 billion.
In addition, Walgreens Boots Alliance entered into a concurrent share repurchase by AmerisourceBergen for proceeds of approximately $250 million, subject to the consummation of the purchase and sale of the shares of AmerisourceBergen in the registered public offering.
Walgreens Boots Alliance’s ownership of AmerisourceBergen’s common stock has not been impacted by the entry into the prepaid variable share forward transactions, but is expected to decrease as a result of the concurrent share repurchase by AmerisourceBergen to approximately 16%, the company said.
[Read more: Walgreens Boots Alliance sells shares of AmerisourceBergen for $694M of initial proceeds]
The prepaid variable share forward transactions are scheduled to settle at two maturities, the first starting in the first quarter of fiscal year 2026 and the second starting in the third quarter of fiscal year 2026, at which time Walgreens Boots Alliance intends to deliver 10.5 million shares of AmerisourceBergen common stock in the aggregate to the counterparties to the transactions, and may receive additional proceeds up to $517 million depending on the stock price at the time.
Proceeds to Walgreens Boots Alliance will be used primarily for debt paydown and general corporate purposes, the company said.
[Read more: Retailer of the Year 2021: Walgreens seizes its omnichannel opportunity]
AmerisourceBergen announced Friday a registered public offering of 10.5 million shares of common stock of the company in connection with Walgreens Boots Alliance Holdings entering into prepaid variable share forward transactions relating to the company’s common stock with certain counterparties.
The company has been advised that, in order to establish their initial hedge positions with respect to the variable forward transactions, the counterparties or their affiliates will borrow an aggregate of 7,293,548 shares of the company’s common stock from third-party stock lenders and will sell those shares in an underwritten public offering through Goldman Sachs & Co., acting as the sole underwriter for the offering. The company is not issuing or selling any shares of its common stock in the offering, is not a party to the variable forward transactions and will not receive any proceeds from sales of the underwritten shares. The underwriter may offer the underwritten shares from time to time in one or more transactions, in block sales, on the NYSE, in the over-the-counter market or in negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices.
The company also has been advised that the counterparties or their affiliates or agents expect to borrow an additional 3,206,452 shares of the company’s common stock from third-party stock lenders and expect to sell those additional shares through the underwriter, from time to time after the offering, in block sales, on the NYSE, in the over-the-counter market or in negotiated transactions, at market prices prevailing at the time of sale or at negotiated prices. Those additional shares will not be included in the offering.
The offering is expected to close on or about Aug. 8, 2023, subject to customary closing conditions.
In addition, subject to the consummation of the purchase and sale of the underwritten shares in the offering, the company intends to concurrently repurchase shares from the Selling Stockholder at a price per share equal to the price at which the underwriter will purchase the underwritten shares from the counterparties in the offering, which price per share will be net of underwriting discounts, in the amount of approximately $250 million. The concurrent share repurchase will be made under the company’s share repurchase program and the repurchased shares will be held in treasury. The closing of the concurrent share repurchase will be conditioned upon the closing of the offering and therefore there can be no assurance that the concurrent share repurchase will be completed. The offering is not conditioned upon the completion of the concurrent share repurchase.